NEW YORK - A new report from Rabobank's global Food & Agribusiness Research and Advisory department looks at the global beef industry, examining current trends in pricing, import and export markets, supply and demand, and the impact of both the lean fine textured beef (LFTB) controversy in the U.S. and Schmallenberg virus in the EU.
In the report, Rabobank's global team of animal protein analysts says there are downside price risks in cattle/beef markets during Q2 2012. Rabobank expects a slightly larger global supply, led by Brazil and other countries in the Southern Hemisphere, amidst a global economy which remains relatively weak.
For the rest of the year, however, cattle prices should recover again as markets shift from the short term supply bulge (primarily Brazil) to materially lower supplies, as the majority of the beef producing countries go through liquidation, a retention cycle, or weather-related problems.
Nevertheless, a significant rise in prices may be limited by weakness in economic growth, which may prompt shifts towards cheaper sources of protein, notably in the developing world.
Longer term, Rabobank's view is that global meat protein and especially beef supplies will continue to lag income and population growth in important emerging markets. This will support prices while raising volume and cost risks to processors, and price risks to buyers.
Rabobank is a global financial services leader providing wholesale and retail banking for the food and agricultural industry, asset and investment management, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank today is one of the largest and safest banks in the world, with more than $850 billion in assets and operations in over 40 countries. In North America, Rabobank is a premier financial services provider to the corporate food, beverage, agriculture and agribusiness industries.