Introducing the World's First Global Producer Price Indices for Beef Cattle and Sheep

Simple Summary Global finished cattle and sheep production and prices are becoming increasingly volatile due to various demand, supply, animal disease, and environmental factors. With beef and sheep production systems being globally connected, an approach monitoring the developments of global meat prices as received by producers becomes increasingly important. This paper presents four global price indices for beef and sheep meat based on prices received by livestock producers obtained from 33 beef and 20 sheep producing countries. These indices are: finished cattle, weaner cattle and lambs producer price indices, as well as a lambs and sheep producer price index-all using an internationally standardized approach. These global indices and associated country and regional indices are used to monitor and explain developments in global beef cattle, lambs, and sheep prices over the index period 2000-2019. The global farmgate cattle and sheep prices have been mainly impacted by developments in global supply and demand, as well as changes in international market access. However, factors which are more local in nature, such as droughts, diseases, local economic developments, exchange rates and policy interventions, have also had a considerable impact on price developments. While international beef and sheep meat price developments are usually measured with meat trade prices (provided by FAO), no comparable information exists on world average of national prices that producers receive for livestock. This paper aims to fill this gap by introducing a set of global producer price indices representing cattle, lambs, and sheep prices as received by producers: the agri benchmark of weaner cattle, finished cattle, lambs and lambs and sheep price indices. These Laspeyres, production-weighted indices measure changes in global farm gate prices as provided annually by the agri benchmark Beef and Sheep Network, with this paper covering prices between 2000 and 2019. The results showed that growing Asian imports, local economic developments in South America, the interconnection with the dairy sector in Europe, growth of beef consumption in China and exchange rates shifts are the key factors that drove developments of global beef producer prices over the past 20 years. Droughts in Oceania and the rapid rise in China's sheep meat prices are highly reflected in the Global Lambs and Lambs and Sheep Meat Price indices. The indices indicate whether cattle and sheep producers globally are receiving more, or less, for the commodity and may increase or reduce production and investment accordingly. This will be of more use if there were similar producer price indices for competing enterprises, such as dairy and cropping, and for competing proteins, such as pigs, poultry, and fish.

Automated summary

Global finished cattle and sheep production and prices are increasingly volatile due to various factors, with this paper introducing four global price indices for beef and sheep meat. The indices monitor and explain developments in global beef cattle, lambs, and sheep prices over the period of 2000-2019, highlighting the impact of global supply and demand, as well as local factors such as droughts, diseases, and exchange rates.