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Manufacturing beef is set to become cheaper this year as South American herds bounce back from drought and US production booms, according to Informa Agribusiness Intelligence.

Global beef production rose by about 1% in 2016, and is “expected to increase consistently over the next several years”, with increases in cattle numbers in South America and the US “more than offsetting” declines in Australia, its latest market report predicts.

US beef production is surging in the wake of the “aggressive” cyclical expansion of the country’s domestic herd since 2014, while South American cattle herds are “recovering from a period of serious drought”.

Higher production means global beef prices are set to “deflate” in 2017, the report says, driven by a sharp decline in beef and cattle prices in the US where the market is also coming under pressure from “larger competing pork and chicken supplies” .

Beef prices in the US, which is the world’s largest beef importer, have been driven downwards by the country’s approval of fresh and frozen beef imports from Brazil and Argentina last year, which has increased competition for New Zealand and Australian beef imports in the market.

In 2016, US wholesale prices fell 13% year on year, and Informa predicts they could fall by another 7%-8% in 2017.

Further growth in US beef production in the years ahead, accompanied by “large competing meat supplies”, will lead to “further deflation in US beef prices at all stages of the marketing channel”, the report predicts.

This would put further downward pressure on global beef prices, and could add to concerns a post-Brexit free-trade deal with the US would potentially lead to cheaper hormone-treated beef flooding the UK market and undercutting prices.