China to Influence Global Beef Markets in 2014

China is expected to continue to be a major driver in global beef and dairy markets this year.

According to analysts at Rabobank there could be a looser global dairy market, on the back of strong production, and tight beef supplies.

The agricultural analysts’ beef and dairy quarterly reports both predict that markets will see prices supported, with Chinese demand featuring heavily as beef production is held back by lower feed costs and herd expansion.

Dairy production is predicted to be higher, but Rabobank says China will buy surplus.

Beef values are globally high and at record levels in the US and Canada.

Since June, Rabobank’s Global Cattle Price Index lifted six per cent.

This was supported by lower than expected supply in key regions.

Tight supply forecasts mean no let-up in beef prices next year, particularly for the first half of 2014.

Rabobank analyst Albert Vernooij said the expanding Chinese beef demand is expected to continue until 2016.

"China's importance and influence on the global beef market is set to continue to increase in 2014," said Mr Vernooij.

"China's imports of both frozen and chilled beef are expected to grow further, driven by the shortage of beef in the domestic market, reflected in record high retail prices. We believe that the value of the Chinese markets will grow in excess of 10 per cent annually over the next three years."

Meanwhile, market analysts in the US believe that US beef production is will decline from 25.68 billion pounds in 2013 to 24.17 billion pounds in 2014.

From a 19 year low of 460 million pounds in 2004, US beef exports grew to 2.79 billion pounds in 2011, but declined to 2.46 billion pounds in 2013.

A further decline in production is expected to limit exports to 2.3 billion pounds in 2014.

Domestic per capita beef supplies in 2014 are projected at 53 pounds, down from 56.5 pounds in 2013.

Fed cattle prices averaged near $126 in 2013 and are projected to average near $130 in 2014.