Trade deals pivotal for 2018 beef production

According to the Rabobank Beef report for the first quarter of 2018, trade deals and the implementation of blockchain technology will be key for the category over the next 12 months.

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is expected to be signed next month, and Rabobank expects beef producing countries in the trade agreement such as Australia, New Zealand, Mexico and Canada to see gains.

Less clear-cut is the EU/Mercosur deal that would allow countries in the latter to send 99,000 tonnes of beef to the former at a lower tariff rate. Mercosur wants to increase this amount 150,000 tonnes however the EU is less keen which could create a stand-off.

Blockchain​

The report’s author, Angus Gidley-Baird, Senior Analyst – Animal Protein, explained why blockchain will be key for beef in 2018.

“While many of the early applications have been driven by the desire to increase traceability and transparency, with a focus on food safety, opportunities do exist further up the supply chain,”​ he said. “Blockchain is superior to current solutions when it comes to sharing genetic traits, making it simpler to track productive performance. A chain including, among others, the producer, feedlot, farmer, and genetic organisation would be able to share performance and verify breeding values, which is all transferred in real-time in the transaction.​

“The shared-ledger approach of blockchain dramatically simplifies back-office processes such as transaction reconciliation and reporting: a benefit for both beef processors/packers and farmers. Previously, where reconciliation required collating and cross-checking paperwork from multiple sources, the technology now instantly reconciles the transaction between all parties.”​

Regional focus​

Other highlights of the report included the US production statistics which showed that a combination of rising cattle numbers, favourable market conditions and weather conditions meant that production increases have risen from the estimated figure of 3% (at the end of 2017) to 5% for 2018.

In Australia, beef prices are expected to be hit by dry weather during the first quarter of the year although exports did rise 3% in 2017, driven by growing exports to Japan.

Brazil is expected to see a 5% year-on-year growth in beef production which was enhanced by an increasing number of discarded calves last year.