Conference warns on beef profitability
An international conference has warned that rising profitability in the beef sector could be hit by higher grain and feed prices.
The global agri benchmark network, made up of more than 35 beef economists from 25 countries, including Eblex senior analyst Mark Topliff, held a summit in Austria to discuss trends in the industry and emerging patterns.
Agricultural economists from 25 countries work together in the agri benchmark beef and sheep network to analyse and discuss the recent developments, and the future trends of beef and sheep production in the most important production regions in the world. An annual comparison of typical cow calf and beef finishing farms is a core activity of the network and shows the main differences in the beef production systems, their costs and profitability using a globally standardised approach.
Topliff, who is part of the Agriculture & Horticulture Board’s Market Intelligence department, said: “What we found is that, globally in 2010, beef prices had recovered, driven by an increase in demand.
“Exchange rate movements and price developments for calves and store cattle helped profitability. However, it is expected that grain and feed prices could ultimately lead to lower profits in some countries this year.”
Dr Claus Deblitz from the Johann Heinrich von Thünen-Institut in Germany, coordinator of the network, added: “The question now is where and with which type of production systems beef will be produced in the future, and this is in the focus of agri benchmark’s future work.”
A costs of production report from the network will be published in September. For more information on agri benchmark, visit www.agribenchmark.org
Other conclusions to come out of the conference included:
• Some Asian countries, as well as Russia, are facing a growing gap between domestic supply and demand
• In a number of EU-27 countries, such as France, Spain, Italy and Austria, the possible shift of single-farm payments into land-based payments could have negative income impacts on finishing farms with historically higher stocking rates
• Beef continues to be affected by developments in the other meat sectors, and vice versa
• High grain prices push grass-fed beef production out of locations where crop production becomes profitable.