Hunger for beef set to drop across the globe
The blows from the global COVID-19 pandemic keep coming and this time it’s demand for beef that could feel the sting, according to a recent report.
DEMAND for beef could decline as the global economy suffers the blows of the ongoing coronavirus pandemic, and supply and distributions chains emerge as major casualties.
That’s according to the latest Rabobank beef quarterly report, which forecasted sluggish beef meat demand globally.
Rabobank animal proteins senior analyst Angus Gidley-Baird said the report forecast global beef production this year to drop about 1 per cent compared to last year.
High levels of female slaughter in Brazil and Australia has reduced global breeding herds, while restocking in Australia could reduce the number of cattle slaughtered.
A slowing economic outlook — Rabobank has forecasted world economic growth to contract 2.6 per cent this year — could have a knock-on effect for beef demand.
“As a perishable product, there is a consistent relationship between production and consumption, whatever beef is produced will be consumed relatively quickly,” Mr Gidley-Baird said.
“With economic stress there is also the risk that consumers shift to cheaper animal protein, such as pork and poultry, or to less expensive beef cuts.”
East coast cattle slaughter year to date is down 8 per cent, with female slaughter down 13 per cent, according to the report.
Mr Gidley-Baird said reduced slaughter levels had also reduced exports of red meat by about 1 per cent for the year to date.
Red meat exports into China throughout February and March were disrupted, before recovering in April.
US red meat exports throughout March and April declined with cattle slaughter dropping about 50 per cent compared to last year due to processor plant closures.
“Beef prices jumped to record levels, the comprehensive cutout reached USD470c/kg in early May, and fed cattle prices dropped,” Mr Gidley-Baird said.
Meat and Livestock Australia senior market analyst Adam Cheetham said as the coronavirus pandemic was still unfolding, it was difficult to predict what impact it would have on global demand and production.
“The processing sector in the US has been affected, and their beef production. Brazil could find themselves in a similar situation,” Mr Cheetham said.
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