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Agriland
6 days ago
- Business
- Agriland
Rabobank: Uncertainty for global beef markets
Global cattle markets have all been trending higher in the first half of 2025, according to a recent RaboResearch report. However, since US President Donald Trump took office in January 2025, uncertainty and unpredictability have reverberated through the global beef market. With beef as one of the largest agricultural commodities traded by the US, any change to US trading arrangements has the potential to affect the beef market at a national and, in turn, a global level. With the global supply and demand situation, RaboResearch expects trade flows to be maintained. Source: RaboResearch However, this is likely to change if major trading blocs such as Europe and China become involved in a trade war with the US. Contracting supplies driving up cattle prices Global cattle markets have been trending higher in the first half of 2025, according to RaboResearch. European prices experienced an especially strong rise in the first quarter of 2025, as domestic supplies contracted while demand remained strong. Senior analyst – Animal Protein for RaboResearch, Angus Gidley-Baird said: 'The rise in European prices now puts them in line with the strong North American cattle prices, which continue to rise slowly. 'In both Europe and the US, disease and pests are affecting cattle supplies. In Europe, and now in the UK, bluetongue continues to affect the herd. 'Meanwhile, New World screwworm in Mexico has caused US authorities to close the border to Mexican cattle imports, and the risk of potential infestation in the US is increasing.' These health threats are challenging production in markets where cattle supplies are already historically low, likely further supporting already elevated cattle prices. Production declines Global beef production is expected to contract through the remainder of the year, with an overall contraction of 2% projected for the year, according to researchers at Rabobank. The largest contractions are expected to happen in Brazil (down 5%) and New Zealand (down 4%), with contractions also expected in Europe, the US, and China. Australia is one of the few regions expected to see a production increase. Global trade managing disruptions On April 5, tariffs were introduced for many countries exporting beef into the US. Additional, so-called reciprocal tariffs for identified countries are on hold until early July, and the US-China tariff escalation has also been put on hold until early August. While negotiations are ongoing, some redistribution of beef trade volumes around the world is becoming apparent. Reports are emerging that Chinese buyers are looking more toward Australian, New Zealand, and South American suppliers as US beef becomes more expensive. Global beef demand to remain stable Although the full extent of the trade war remains uncertain, RaboResearch has stated that it remains cautiously optimistic about beef demand and trade flows. 'Beef isn't being singled out as a targeted commodity, and most major exporters are only facing baseline tariffs,' Gidley-Baird continued. 'So early indications suggest that competitive positions will be maintained, albeit with added costs to the system. 'The global supply and demand situation should maintain current trade flows. But if the US-China tariff war escalates and Europe becomes more involved, this is likely to change. 'Much of the media attention has been on the imposition of tariffs, but this may only be the opener to the main event,' he added. However, RaboResearch said that while tariffs may have grabbed headlines, the real story will be the implications of shifting global trade dynamics.
West Australian
6 days ago
- Business
- West Australian
Australian farmers poised for near-record beef production as other countries produce less
Australian cattle farmers are gunning to exceed the beef production records they set last year, with cattle prices expected to 'remain steady' or potentially rise in the face of political tensions. Rabobank's new Australian beef seasonal outlook painted a positive picture for beef producers — who produced 2.57 million tonnes last year — with the nation's high beef production volumes being matched by growing global demand. The annual report, produced by the agribusiness banking specialist's RaboResearch division, revealed the 'relatively-balanced' market would support stable prices and good returns for Australian beef producers. Report author, RaboResearch senior animal proteins analyst Angus Gidley-Baird, said successive favourable seasons – with the exception of ongoing significant dry areas in Victoria and south-east South Australia – had allowed Australian cattle numbers to build. 'The increased calving from this larger cattle inventory is now flowing into markets as finished cattle, with 2024 setting a new record (2.57Mt) in Australian beef production,' Mr Gidley-Baird said. Rabobank modelling indicates that the National Young Cattle Indicator should trade between 360¢/kg and 425¢/kg lwt (liveweight – the weight of a live animal) in 2025 with an average across the year of 409¢/kg. 'This would be a 23 per cent increase on the average price of 2024,' Mr Gidley-Baird said. 'And modelling for 2026 shows a range of 400¢/kg to 420¢/kg with an average across the year of 410¢/kg.' Mr Gidley-Baird said higher cash receipts would offset an expected rise in costs, leading to a lift in farm cash income. The number of cattle turned off this year is expected to remain high, with high carcase weights meaning the production volume would remain close to last year's record. The beef production boom comes as Australia's competitors temper their production this year, creating demand for imports and reducing competition in Australian export markets. Brazil's beef production was set to plummet five per cent, or 555,000t, while US production would dip 100,000t and China 40,000t. With these factors in mind, Mr Gidley-Baird said it was likely cattle prices would remain steady or even rise. 'However, as we have seen in the first four months of the year, there remain uncertainties around trade, with the imposition of tariffs and geopolitical tensions that can lead to trade disruptions,' Mr Gidley-Baird said. 'Notwithstanding, 2025 is shaping up to be a good year for the Australian beef cattle industry with steady prices and strong production.' The US is flagged to remain Australia's biggest beef export market, which Mr Gidley-Baird said would drive 'strong import demand and higher prices' — despite US President Donald Trump's tariffs on Australian beef imports. Rabobank's report echoed prior industry forecasts that the US was entering a period of cattle-herd rebuild, but predicted it would 'be minor' this year. The report revealed Australia's domestic beef consumption, per capita, would drop slightly this year due to ongoing economic pressures. But that figure could change as household incomes increase, according to the Reserve Bank of Australia.
