The global beef market heads into 2017 dominated by supply growth and soft global prices, according to the Rabobank Global Beef Quarterly Q4 2016.

With US and Brazilian beef production forecast to increase by a further 3% in 2017, supply will continue to dominate.

The capacity of the market to balance this growth in supply will rely heavily on the ability to stimulate demand, particularly in Asian nations.

Angus Gidley-Baird, Senior Analyst of Animal Protein at Rabobank said that four key factors will influence the direction of the beef market in 2017.

These are South American growth, space in the US market, China’s demand and South-East Asian demand.

If the movements in the US Dollar and Mexican Peso following the US election are any indication of the future, growing US production will struggle to find relief in increased exports.

“But, at the same time, the growing Mexican beef industry could find new opportunities in the global market.”

Rabobank analysts believe the future of the Trans-Pacific Partnership (TPP) is now unlikely. Following the US elections, indications are that there will be no further progress on the implementation of the trade deal.

A Rabobank spokesperson said that while there are missed opportunities for beef-trading nations, courtesy of the TPP, it may create opportunities for China to promote its own regional trade agenda.

“Dry conditions in Inner Mongolia and lower dairy prices have caused increased cattle slaughter in China.

“While pushing domestic cattle prices down, imports into China have remained competitive thanks to increased volumes from Brazil.

“The current higher levels of production are expected to be followed by lower production in 2017, further supporting demand for imports.”