Beef prices in many major beef producing countries will remain under pressure for the rest of 2016, according to Rabobank's Global Beef third quarterly report.
Falling US beef prices combined with a slowing Chinese economy is expected to create a downward pull on global prices.
However, Brazil is set to be the exception to this pressure as an improving economic outlook and increased beef exports is causing prices to increase in the South American nation.
The Rabobank Beef Index remained at a reasonably consistent range for the first half of 2016, with a fall in US and Canadian beef prices balanced by increases in both Australia and Brazil.
The report also shows that domestic beef prices in Russia have increased this year, due to a shortage of cattle caused by a contraction of the Russian dairy herd.
Until recently, Russia was a dominant player in the global beef trade, but geopolitical events and a depreciating currency has seen it withdraw from global trade.
According to Rabobank's Angus Gidley-Baird, there is some potential for the Russian market to improve, but significant obstacles lie ahead.
Russian beef imports have the potential to return to pre-2015 levels if import bans are removed, the oil price recovers, and the rouble regains strength.
"However, with import bans recently extended to the end of 2017, and with the continuing bleak economic outlook, beef imports into Russia are not expected to change in the coming years,” he said.
Other Beef Markets
In August, the US and Brazilian governments agreed to allow access to each other's fresh beef markets following extensive negotiations.
Brazilian exports to the US will be limited by a tariff quota of 64,800t, however, exports of around 40,000t are possible in 2017, the Rabobank report indicates.
The report also suggests that China's slowing economy will affect beef consumption in the future. The third quarter is usually the peak season for animal protein consumption in China, meaning beef prices will be supported by the rising seasonal demand.
However, in the long term, domestic beef prices in China are expected to decline given exposure to a weaker economy which is expected to slow further in 2017.
Meanwhile, in Australia, improved seasons will result in slightly more heavy cattle becoming available.
The ongoing margin squeeze felt by processors and feedlots leads Rabobank to expect to see prices ease slightly from their record highs through the remainder of 2016.
Although with limitations on supply remaining critical, prices will continue to remain high.