International

Inflationary pressures continue to impact the global beef market

Beef

Further increases in beef prices run the risk of consumers substituting to other proteins or reducing their overall consumption, analysts warn.

Posted on Mar 02 ,14:27

As global beef supplies are to remain tight this year, prices are expected to rise. However, is not just the lack of beef in the international market that is going to keep prices elevated, Rabobank analysts warned. Over the past two years, retail beef price movements have been phenomenal, driven largely by strong consumer demand and some supply shocks. 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, Rabobank's quarterly report says..

Rising inflationary pressures continue to impact the beef supply chain. A number of the cost increases will be permanent and will need to be accommodated within the supply chain. Others are more cyclical and over time we expect them to decline, indeed we may start to see some easing of these costs through 2022. While the demand-led increase in beef prices may have alleviated some of the pressures of the cyclical cost increases, finding a way to maintain beef demand and cover further cost increases may prove a more challenging task.

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. But consumers’ willingness to pay for beef across most markets has been phenomenal, and while there may be signs of weakening demand in some markets, others remain strong.

(Photo source: Market Research Telecast)

Comments

Similar articles