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Beef Imports From South America Set to Increase
A recent report by Rabobank estimates that South America is set to increase its beef exports by 11% in 2016. There are three factors contributing to this increase - favorable currency values, improved access to importing countries, and increased availability of beef.
While Brazilian consumers are seeing their purchasing power decline, local beef prices remain high. On the supply side, cattle producers have been encouraged to maintain cows in their herd rather than sending them to slaughter – a result of high calf prices driven by low calf availability.
Meanwhile, the weaker currency has made Brazilian beef very competitive on international markets, and strong global demand has pushed local market prices higher. The result: High domestic beef prices have pushed consumers toward cheaper competing proteins like poultry, which in turn is freeing up additional beef for exports.
Three additional highlights from the report include:
- Official Chinese imports of beef continue to increase despite a slowing economy. Beef imports to China increased by 60% from the same period last year, reaching 473,000 tons.
- Australian beef production is expected to remain low in the first half of 2016.
- According to the USDA’s outlook report dated February 25, U.S. imports of beef and veal will drop by 24% to 900,000 tons.