Once the current high supply has been worked through the market, global beef will regain its positive trajectory in the third quarter of 2014, according to the latest Beef Quarterly Q2 2014 report issued by Rabobank. Tightening of competing animal protein supplies will also support beef’s recovery. These positive developments will rely upon shifting global factors including drought in the U.S. and Brazil affecting how many head of cattle go to slaughter, rainfall in Australia, Indonesian imports during Ramadan in July, and Chinese imports at the end of 2014 during their high season. Chinese beef imports remain historically high. In the first four months of 2014 equaled 101,000 tons – a 34% increase year on year. In Australia, during the first four months of the year total cattle slaughter increased by 12% pushing boxed beef exports to record highs. In the U.S. prices reached an all-time record high in the first quarter of the year and a hard winter has caused increases in cost of production resulting in year to date Canadian feeder cattle exports to the U.S. to be 44% above a year before. This unsupportable rate is expected to sharply decline in the second half of 2014. Increasing production costs and the reports of an atypical case of BSE in Mato Grosso resulting in international embargoes have been affecting the Brazilian beef sector. Despite this, exports remain strong and prices are expected to recover in the second half of the year.
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