A shift in the Chinese diet has created a high demand for grain to feed beef cattle.
South American corn and soy yields took a beating from drought this season, while China’s rapidly growing middle class continues its love affair with beef steaks.
The shift in diet has held strong in the face of the country’s economic slowdown, underpinning demand for corn and soymeal used to feed cattle.
“Demand is definitely growing faster than what we had expected, while supply ended up being less than we expected,” FAO senior economist Abdolreza Abbassian told Reuters three days ahead of the organisation’s meeting of Latin American agriculture ministers in Buenos Aires.
“You put these two factors together and it explains what’s happening today with prices globally,” he said by telephone from his office in Rome while soybean futures on the Chicago Board of Trade explored six-month highs.