According to Rabobank’s recently-released Beef Quarterly report, the global beef market will continue to grow in 2017, led by strong growth out of Brazil, Argentina and the US.

The report also identified four key developments that will influence global beef trade in 2017.

Report co-author and Rabobank senior animal proteins analyst Angus Gidley-Baird said while softer global prices would exert some pressure on Australian beef prices, they are likely to remain well above the five-year average.

“In contrast to what we are seeing globally, Australian production is set to ease slightly in 2017 – to its lowest level in over a decade – as the domestic herd continues to rebuild after years of drought,” Gidley-Baird said.

“And it is this constrained local supply, together with restocker demand, that is expected to create a floor in the domestic beef market.”

Australia’s beef exports are also expected to remain low, with volumes to the US and China down considerably on last year’s levels.

“In the first 10 months of this year, we have seen our beef exports to the US fall by 44 per cent year-on-year, while into China they have dropped by 36%,” Gidley-Baird said.

“South Korea has bucked the trend, with exports up by four per cent, to remain a key market for Australian product.”

The Rabobank report also identified  four key developments that will influence global beef trade in 2017 – South American growth, space in the US market, China’s demand and growth in South-East Asia.

“On balance, these developments will keep a lid on global prices next year, with the capacity of the market to balance this growth in supply relying heavily on demand out of Asia,” Gidley-Baird says.

Much of the increased competition in the global marketplace will come out of South America, with Brazilian beef supply expected to be up by three per cent in 2017.

“This will see their export program ramp up next year, with Brazil recently gaining access to the US market and looking to pursue access into Japan,” he said. 

“Argentina is also set to increase their beef production, which could quickly flow into higher exports.”

Meanwhile Gidley-Baird said the anticipated 3% increase in US beef production in 2017, and the willingness of the US consumer to absorb this volume, will have ramifications not only in the US but across global beef markets.

“It will be challenging for higher supplies in the US to find relief in increased exports, particularly if the US dollar remains at current levels,” he said.