3 minute read
RaboResearch: Cost Increases to Challenge Global Beef Demand
from NMS March 22
Rabo Research
Cost Increases to Challenge Global Beef Demand
According to the latest beef report released by Rabobank, global beef markets remain tight. Ongoing strong demand and more limited supplies have kept global beef prices high, but cost pressures are flowing into the supply chain.
Over the past two years, retail beef price movements have been phenomenal, driven largely by strong consumer demand and some supply shocks. In Q4 2021, beef retail prices in the US were 23 percent higher than the five-year average and in China they were 24 percent above the fiveyear average.
“In many cases, this increase in prices was caused by demand pull. With supply unable to keep up, the increase in demand has created an imbalance in the market and as a result beef prices have lifted,” explains Angus Gidley-Baird, Senior Analyst – Animal Protein at Rabobank.
Supply chain costs continue to rise, and will test consumers’ willingness to pay
Rising inflationary pressures continue to impact the beef supply chain. Among the cost increases, labor costs (and availability), freight, and energy are some of the largest, along with feed.
According to Gidley-Baird, a number of the cost increases – those associated with labor and sustainability, for example – will be permanent and will need to be accommodated within the supply chain. Others – such as freight, energy, and feed costs – are more cyclical and over time are expected to decline, allowing some easing of these costs through 2022.
In many cases, the rise in retail beef prices have seen some of the largest increases in history. Beef prices continued to increase through 2021, while many of the other proteins remained stable or contracted. “Further increases in beef prices run the risk of consumers substituting to other proteins or reducing their overall consumption. And we are starting to see signs that they might be reaching their limit,” • • • Legal For Trade Mobile and Stationary Scales Durable Construction • Legal For Trade • Mobile and Stationary Scales • • Legal For Trade 12ft - 22ft Length Available • Durable Construction • Mobile and Stationary Scales Most sizes available for immediate installation • Legal For Trade • 12ft - 22ft Length Available • • Durable Construction Mobile and Stationary ScalesMost sizes available for immediate installation • • 12ft - 22ft Length Available Durable Construction • Most sizes available for immediate installation 12ft - 22ft Length Available Most sizes available for immediate installation
Phone: 806-655-3033 • 325-554-7434 Cell: 806-683-4613 • steve@expressscale.com Phone: 806-655-3033 • 325-554-7434 www.expressscale.com Phone: 806-655-3033 • 325-554-7434
Cell: 806-683-4613 • steve@expressscale.comCell: 806-683-4613 • steve@expressscale.com www.expressscale.comPhone: 806-655-3033 • 325-554-7434 Cell: 806-683-4613 • steve@expressscale.com www.expressscale.com
www.expressscale.com
concludes Gidley-Baird.
No major impacts on global beef markets expected from the tensions between Russia and Ukraine
With Russia having a less prominent role in global beef markets than five years ago, Rabobank does not expect big impacts on global beef markets. However, indirect impacts are possible. Rabobank’s January agri commodity market report highlighted that Russia and Ukraine account for 29 percent of global wheat exports, so any trade embargoes could pressure feed prices. The feed complex is also under pressure from dry conditions in South America, with potential impacts on corn and soy production and prices. ▫
www.aerotechteam.com Aerial Rangeland Spraying, Wildlife Surveys, & Predator Control by Fixed-Wing & Helicopter
AERO TECH
5333 E. 21st Street, Clovis, NM 88101 Ted Stallings – (575) 763-4300 Cameron Stallings – (505) 515-1189 Denton Dowell, Sales Representative Cell (575) 708-0239 • denton@aerotechteam.com
Editorial Calendar
Plan your advertising for the coming year!
JANUARY — Wildlife; Gelbvieh; Joint Stockmen’s Convention Results FEBRUARY — Beefmasters; Texas Longhorns MARCH — Limousin; Santa Gertrudis APRIL — Dairy MAY — News of the Day JUNE — Sheepman of the Year JULY — Directory of Agriculture AUGUST — The Horse Industry SEPTEMBER — Charolais; Fairs Across the Southwest OCTOBER — Hereford; New Mexico State Fair Results NOVEMBER — Cattleman of the Year; Joint Stockmen’s Convention Preview; Angus, Brangus, Red Angus DECEMBER — Bull Buyers Guide
