Beef markets across the globe are still suffering
Beef consumption is lagging behind the figures reported in the past years due to the impact of the coronavirus crisis across the globe. A beef quarterly report issued by Rabobank is mentioning restrictive measures, supply chain disruptions and foodservice closure as the main obstacles in restoring beef consumption to previous levels reported in the last couple of years. The US, where weekly fed slaughter capacity has recovered to 97% to 98% of pre-COVID-19 levels, and New Zealand, where processing capacity returned to normal levels in May, are the markets that are seen as positive examples in the global picture of the sector. At the same time, "foodservice across Europe has resumed operations, although with restrictions, and as a result, demand for beef has not fully recovered. Covid-19 cases are increasing again in some countries, but are being managed regionally, rather than complete lockdown of countries", says the analysis.
On the other hand, despite the fact that the situation in China has calmed down since spring, local government actions to control the spread of new cases are slowing the recovery of foodservice. Given suspected connections between new Covid-19 cases and packaging of imported seafood and other animal proteins, imports and cold storage are under surveillance, leading to delays and uncertainties with imports.
In Canada, following a drastic reduction in slaughter rates during April and May due to Covid-19 outbreaks at plants, weekly slaughter rates have recovered. Although a fed cattle backlog still remains, there will be ample opportunity to clear the backlog in Q3.
On the other hand, the second wave of infections that hit Australia and Brazil may result in a slow recovery of the market, although lower livestock availability in Australia leads the team of analysts to believe the disruptions to beef slaughter volumes will be minimal.
"Cattle prices around the world showed signs of recovery from May through July. Cattle prices (in USD) in most major exporting countries increased, while the US saw cattle prices decline, resulting in an overall lift in the index," analysts said.
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