The beef markets will pressure packers to cut costs, including what they pay for cattle, the bank said.
Beef production was up by two per cent over the first three months of the year and cattle on feed numbers were five per cent higher than the five-year average.
Despite the squeeze on packers, market cattle prices remain strong across the seven main markets, Rabobank said.
Beef exports to China set a record in the first quarter this year.
