South America's beef exporters are set to increase exports by an estimated 11% in 2016, supported by favorable currency values, improved access to importing countries and increased availability of beef, according to Rabobank’s newly released “Beef Quarterly Q1 2016” report.

“While Brazilian consumers are seeing their purchasing power decline, local beef prices remain high,” the report notes.

On the supply side, Rabobank said high calf prices, driven by low calf availability, have encouraged cattle producers to keep cows rather than cull them. The country’s weaker currency has also made beef from Brazil very competitive in international markets, and strong global demand has pushed local market prices higher. The resulting high domestic beef prices have pushed consumers towards cheaper competing proteins, such as poultry, freeing up additional beef for exports, Rabobank noted.

For other regions, the report says despite a slowing economy, China's official imports of beef continue to increase and, in fact, surged by 60% year over year in 2015, reaching 473,000 metric tons.

“It is expected that China will open the market to more countries in 2016 to assist in lowering the beef price in local markets to a more affordable level,” the report notes, adding that China is expected to import more beef from South America this year.

Rabobank said supplies in Australia are drying up as beef production in the country is expected to remain low in the first half of 2016.

“Meat processing plants that closed for the Christmas period have either not opened or reopened but with reduced capacity to accommodate ongoing lower supplies,” the report explains.

In the U.S., Rabobank said the U.S. Department of Agriculture outlook released in February forecasted that U.S. imports of beef and veal in 2016 will drop by 24% to 900,000 mt.

“Their forecast is based on very strong imports in 2015, which have led to record-high cold storage stocks, as well as recovery in the U.S. herd and increased production, which will dampen demand for imported beef in the 2016 fiscal year,” the report says.