‘Global beef prices weakened in first four months of 2015’
In the first four months of 2015 on average global beef prices weakened, according to the Agriculture and Horticulture Development Board (AHDB).
However, it says that while prices have weakened it is worth pointing out that this has occurred after a period of record high prices.
The AHDB says that the weighted export price for the top three exporters, Australia, Brazil and the US of chilled and frozen beef exceeded $6,000/t in November last year.
However, in April this year the average price has eased to around $5,360/t, which is almost exactly the same as in the corresponding month a year ago, it says.
On a regional level, the fundamentals driving the beef trade appear to be somewhat different, it says.
Brazilian beef has had a difficult start to 2015, although the situation may be more challenging as Brazil faces more intense competition in low value markets such as the Middle East, according to the AHDB.
According to AHDB, the difficulties in the Brazilian economy, coupled with these trade challenges, are having an adverse effect on consumers, hampering domestic demand.
The USDA says that this is forecasted to result in an increase in Brazilian beef available for the export markets, but since the start of 2015, both prices and volumes of Brazilian beef exports are down on year earlier levels.
In more positive news, the AHDB says the announcement of Brazil gaining access to the Chinese market and talks with US officials on regaining access for fresh beef could result in a change in fortunes for the sector.
In Argentina, prices hit record levels in the first half of last year however, in April 2015 Argentine beef exports are 21% cheaper in Dollar terms, while export volumes are up 40%, compared to the same period in 2014, it says
Part of the explanation of these lower prices is due to challenging market conditions in Argentina’s main export markets, the AHDB says.
For example, Russia has become increasingly reliant on domestic production since placing a ban on EU product, which has resulted in an increase in the availability of beef within the EU, it says.