Rabobank Report Examines Beef Production with 2012 Drought Conditions

Rabobank Report Targets Beef Production Imbalance [August 13, 2012]

By Amanda Brodhagen, Farms.com

Rabobank released its Q3 report contrasting the global beef industry against the 2012 drought being experienced across much of North America. The report looks at the production imbalance levels while seeking to compare the global cattle price index with prices from last year.

The report found that the global cattle index dropped by seven per cent compared to Q1 numbers. Looking to Q3 levels from this time last year were down nine per cent. The dip in numbers is driven by a weaker demand for beef coupled with a high U.S. dollar. Looking to the beef supply - from a global perspective the world is short on beef. The only country that increased its supply of beef is Brazil.

The good news is the downward trend on prices will be balanced out with reduced beef supply in combination with pressures in grain-fed meat. It’s predicted that Brazil, Australia and Argentina will lead the way on beef supply levels increasing levels from last year.

The report concludes that China is becoming a competitive contender in beef cattle production following significant amounts of industry investment.  The report predicts that global supply will grow compared to 2011 and will be driven largely by beef cattle herd liquidation due to undesirable drought conditions leaving pasture fields and grain feed in short supply.