Lower feed costs and induced herd rebuilding in the U.S. will contribute to tight supply, a Rabobank analysis finds.
According to a new report from Rabobank, global beef supply will remain tight into 2014, driven by lower feed costs, induced herd rebuilding in the U.S., and the strong export demand from Brazil and Argentina.
Meanwhile, China's demand for imports is expected to increase.
"The Rabobank Global Cattle Price Index improved further in 2013, supported by both continuing strong Chinese import growth and lower-than-expected supply in the main export markets, making cattle prices mainly positive," explained Rabobank analyst Albert Vernooij.
However, the market has been unable to reach its full potential due to consumers' resistance against high prices in the U.S. and the European Union. In addition, exchange rate movements have impacted the competitive position of exporters, resulting in Brazilian and Argentine beef becoming increasingly attractive and leading to a surge in exports.
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