According to Rabobank's third quarter beef market outlook, global economic conditions—such as the appreciation of the U.S. dollar and the depreciation of the yuan and the real—are clearly impacting the beef trade.
A strong U.S. dollar has led to a reduction in U.S. exports and support for U.S. imports, while a weakening Chinese economy and devaluation of the yuan are curbing beef prices in China, and the devaluation of the real is expected to support Brazilian exports in the coming months.
"With little change expected in major beef-trading economies in the coming quarter, other than a possibility of the US FOMC raising interest rates, a strong US currency is expected to continue to affect global beef trade," according to Senior Animal Protein Analyst at Rabobank, Angus Gidley-Baird.
Meanwhile, New Zealand and Australia beef exports to the U.S. are expected to reach their quota limits in Q4.
Beef quarterly highlights
• New Zealand and Australia exports to the US are reaching quota limits, which—combined with the availability of supply in the U.S. – will result in some short-term softening in the Australian and New Zealand markets.
• There has been little progress in trade developments in the quarter. Australia is still awaiting parliamentary processes to enact the China FTA, Brazil is still progressing towards a trade protocol with the U.S., and the Trans Pacific Partnership remains in negotiation.
• Russia has extended its ban on agricultural products from the EU, the U.S., Canada, Norway and Australia by another year.