Beef Quarterly Q2 2021: Record Prices, but Will They Last?

Many key beef production and consumption areas across the world are currently experiencing high or record prices for beef or cattle. We explore what is driving this and whether it will last. There are also several other issues affecting global beef markets at present.

Report summary

Covid-19

The rollout of vaccines, the transition to robust economic growth, and the advance of the northern hemisphere summer see many areas experiencing lower Covid case numbers and higher economic activity. With restrictions being eased, foodservice sales are also starting to pick up. Figures for China indicated foodservice sales in March were higher than in January 2020, and foodservice sales in the US for April were just below January 2020 numbers. The continued reopening of foodservice should support ongoing demand for beef. On the flip side, low labor availability is starting to restrict operations at some plants, especially in the US.

Argentina suspends exports

Argentina announced in mid-May that it would impose a 30-day ban on the export of beef to alleviate rising domestic beef prices. As Argentina supplied 22% of China’s imports in Q1 2021, this could be bullish to trade prices for beef, depending on how long the ban stays in place.

Sustainability momentum rolls on

In late March, JBS, the world’s largest animal protein company, announced a commitment to achieve net-zero greenhouse gas (GHG) emissions by 2040. JBS joins a growing list of animal protein companies that have set ambitious targets for GHG-emission reductions.

Commodity price hikes drive higher cost of feeding

In April, agri commodity prices pushed to levels not seen since 2011-13, raising concerns about the cost of feed. Rabobank forecasts wheat, corn, and soy prices will remain high – a concern for US cattle awaiting processing and Brazilian cattle faced with poor pasture availability.

Rabobank global cattle prices

Strong demand and limited supplies are driving cattle prices to record levels. The Rabobank Seven-Nation cattle price index shows finished cattle prices across all regions – except Uruguay and New Zealand – rose through March and April.