US beef market to pressure returns

US beef market to pressure returns

Markets
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A Rabobank international expert has urged Australian beef producers to monitor the beef market in the United States.

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A Rabobank international expert has urged Australian beef producers to monitor the beef market in the United States.

Rabobank’s US senior animal protein analyst Don Close said drought conditions and forced herd liquidation, as well as the risk of recessionary pressures on the US economy, could pressure global beef trade and prices.

He said these market developments in the US would directly impact Australian producers.

“The US are the largest export customer Australia has, and with both countries being fierce competitors for export business in Japan and South Korea, they could potentially fight it out for market share in China in the future”.

Mr Close said with US production of beef and also pork up by five per cent there was “a tonne of protein coming into the US”, but also globally.

“Australia is going to have to work harder to find a home for their product in the US,” he said.

“Already we have seen Australia and New Zealand’s share of total US beef production fall from between 12-14 per cent, down to four per cent, because the US is generating more of its own beef.

“US product is also generating a premium over Australian beef.”

He said this caused a reduced incentive to buy Australian product.

“It has created vulnerability for Australia’s beef exports into the US but also in key export markets.” 

“With total US protein now at levels we can’t consume all at home, the US dependency on exports is becoming increasingly important. And this will have a significant impact on Australia as an export-oriented producer,” Mr Close said. 

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