Competition in global markets is set to become more intense in the coming year, as global beef production is pegged to increase by 1.3million tonnes in 2018, according to Rabobank’s latest Global Beef Quarterly report.
With production volumes expected to outpace domestic consumption, the report says exports will become ‘‘more critical’’ and ‘‘shift the balance of power in favour of importers’’.
The United States and Brazil are likely to see the biggest increases in beef exports, but the report says the expansion in global production will come out of all major producing areas, including Australia.
‘‘In the US, beef exports are expected to increase by seven per cent in 2018, as their cattle herd expands for the third consecutive year,’’ Rabobank senior animal proteins analyst Angus Gidley-Baird said.
‘‘While beef consumption is also expected to increase, it will not keep pace with their production growth, and exports are expected to grow to 12 per cent of US production.’’
Mr Gidley-Baird said widespread rains across parts of Queensland and northern NSW in spring reignited producer demand, ‘‘shaking cattle prices out of their declining trend to rise through October and into November’’.
‘‘Seasonal conditions are expected to drive large swings in prices into the first half of 2018, given the low cattle supplies and producers’ desire to restock their herds,’’ he said.
‘‘While domestic cattle producers will face some headwinds from increased global competition in 2018, limited domestic cattle supplies should continue to support a strong Australian market.’’
Mr Gidley-Baird said Brazil was anticipated to increase its export program by five per cent in 2018.
‘‘Brazil is actively accessing new markets and increasing their presence in existing markets, with plans afoot to accredit an additional 11 beef plants to access the Chinese market.’’
If successful, Mr Gidley-Baird said Brazil would have 27 beef plants able to access the Chinese market.
Competition to supply beef into China will become particularly fierce, ‘‘not only for Brazil, but also for the US and Australia’’.
‘‘China’s import demand will be pivotal to balancing the increase in global exports.
‘‘And next year, China are expected to increase their import requirement to 800000tonnes of beef, due to the decline in their own cattle numbers.’’