Beef industry outlook: No let-up seen in commodity prices, Argentinian export constraints may shake up trade, all eyes on UN food summit

By Jane Byrne contact

- Last updated on GMT

© GettyImages/adamkaz
© GettyImages/adamkaz

Related tags: Beef, UN Food Systems Summit, Argentina, cattle prices

Weather and supply constraints are set to keep critical feed grain prices high, finds a new report on the prospects for the international beef production sector.

Rabobank estimates for wheat, corn and soy remain bullish into Q4 2021, which it said will create cost pressures for feed budgets.

Cattle prices in leading beef exporting countries continue to rise or remained stable through Q2 2021, according to the bank’s most recent Beef Quarterly.

“Argentina and Canada were the notable exceptions, with a rather dramatic contraction in cattle prices, and Brazilian cattle prices took a break from their upward trend.”

In late June, the Argentinian government, noted the Rabobank team, implemented a system to restrict beef exports and raise the domestic beef supply; that measure case after a 30-day suspension of beef shipments in May.

“New quotas now limit Argentinian beef exports to 50% of the average monthly volume exported from July to December 2020. As Argentina was the fifth largest beef exported in 2020 and the second largest supplier to China, this cut in export volumes has the potential to significantly impact global beef trade.”

In terms of other trends impacting the global beef market, it noted that global confirmed COVID-19 case numbers began rising again in mid-June, after falling from a peak in late April.

“Numbers in Europe, the Eastern Mediterranean region, Africa and the Western Pacific region have seen large rises. Food retail figures remain strong, and foodservice sales were still improving in June, but the new Delta strain and increased case numbers may impact foodservice in the coming months.”

Sustainability drivers 

Rabobank expects “bold new actions”​ to emerge from the UN Food Systems Summit, which is to be held next month.

The UN, it said, is looking to advance the 17 sustainable development goals, and the analysts expect considerable focus on the livestock sector, and the beef industry, in particular, at the event. “At the pre-summit in early August, meat taxes were one of the issues raised.”

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