Latest news with #AnimalProtein
Agriland
7 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.
Agriland
23-05-2025
- Business
- Agriland
Rabobank: Tariffs disrupt global pork trade
According to a recent RaboResearch report, pork prices have rebounded and remain strong despite shifting trade flows and growing economic and consumer uncertainties. Rising tensions between the US and China are creating opportunities for other suppliers, particularly the EU and Latin America with Brazilian and European pork likely to benefit from the US-China trade disruption. So far, rising geopolitical tensions have had limited impact on global pork markets, but they are likely to redirect global trade volumes in the coming months. Despite the agreement between the US and China to reduce tariffs substantially for 90 days, the added tariffs on US pork could still curtail trade according to RaboResearch. Senior analyst – Animal Protein for RaboResearch, Christine McCracken said: 'For China's swine sector, this development is likely to be price supportive, while alternative suppliers like the EU, Chile, and Brazil may also benefit. 'Chinese importers that previously relied on US pork are likely to face margin pressure, while US pork exporters will likely see weaker offal values. 'With China's market largely out of reach, alternative markets will absorb exports at reduced prices. Heightened US-China trade tensions could also affect feedstocks, particularly soymeal. 'Slower US oilseed exports may reduce feed costs for US hog producers, partially offsetting export losses,' she added. Given the uncertainty surrounding future US trade policy, investment in US pork sector expansion is expected to slow, while other regions may see slightly faster growth according to the research. Pork price rebound Pork prices have rebounded, driven by tighter hog supplies due to limited growth in the sow herd and ongoing health and productivity challenges, according to the analysis by RaboResearch. The slow production response also reflects growing market uncertainty resulting from weaker economic growth prospects and the risk of trade disruptions from rising geopolitical tensions. 'We expect limited demand improvement for the rest of the year. High beef and poultry prices, along with the expected shift in consumer spending from foodservice to retail (where pork tends to perform better) may offer support,' McCracken continued. However, potential export disruptions in the US and China, combined with slower economic growth and consumer spending pressures, are likely to cap additional improvement. Despite these headwinds, the industry remains relatively well-balanced, as limited sow herd growth is expected to constrain global pork supply. Disease challenges linger Herd health challenges continue to constrain production in several key regions and, in some cases, are also dampening demand. The most significant development in Q1 2025 was the reappearance of foot-and-mouth disease (FMD) in the EU – marking the first outbreak in decades – and new cases in pigs in South Korea. To control the disease, authorities in the EU established containment zones, increased surveillance, and imposed transport restrictions. Although several trade restrictions were put in place, they are gradually being lifted due to the absence of further outbreaks. Across much of Asia and parts of Europe, producers are also battling African swine fever. New cases and challenges in controlling the spread among wild boar populations are contributing to ongoing production losses and trade disruptions, the research indicates. Additionally, porcine reproductive and respiratory syndrome is negatively impacting pork production in parts of North America and Europe. South American harvest Expectations for a strong South American harvest and good planting progress for corn and oilseeds in the northern hemisphere are providing tailwinds for feed cost. However, geopolitical disruptions continue to impact global grain and oilseed trade. Factors such as US dollar volatility, rising geopolitical tensions, ongoing US-China trade disruptions, and signs of a potential resolution to the Russia-Ukraine war are all influencing short-term market dynamics. Larger grain supplies and rising stock levels should help keep feed costs manageable. 'Our base case scenario for commodity prices suggests relatively flat feed costs for the remainder of 2025. However, geopolitical developments and weather-related uncertainties remain key risks,' McCracken concluded.
