Global beef trade patterns will continue to shift

Rabobank says beef markets continue to be split into two distinct parts.

November 23, 2023

3 Min Read

According to a new Rabobank report, global beef markets continue to be split into two distinct parts, with high prices and contracting production in the U.S. and increasing production and low prices in the Southern Hemisphere.

“Opposing positions in cattle cycles, exaggerated by weather patterns, have caused a redistribution of beef trade that will continue in 2024,” explained Angus Gidley-Baird, senior analyst of animal protein at Rabobank.

The contractionary phase in the U.S., after prolonged herd liquidation, will see production levels decline. According to Gidley-Baird, this will generate the need for increased imports and will reduce exports. If weather conditions improve, this contraction may be even more pronounced. Meanwhile, the expansionary cycle in Australia, coupled with expected drier conditions and some liquidation of surplus stock, will see production volumes rise. Brazil’s production will also continue to rise. As a result, exports from these two countries will increase.

Global beef volumes will remain steady in 2024

“The volume balance for the major beef producing and consuming regions of the world (that we track) will remain relatively constant in 2024,” said Gidley-Baird. The aggregated production volumes of the major producing countries are expected to remain similar to the expected volumes in 2023. Increases in production in countries such as Australia, Brazil, and Mexico will offset declines in Canada and the US. Meanwhile, aggregated consumption levels are expected to drop by 1%. Declines in countries like Canada and the U.S. will not be fully offset by gains in countries such as China, South Korea, and Brazil.

Trade volumes need to adjust

Adapting trade patterns to align with shifts at the country level will be essential. The U.S. is poised for significant changes. Having transitioned to a net import position in 2023, Rabobank anticipates a 4.5% contraction in production and a 3% decrease in consumption in 2024, thereby amplifying the net import status. Australia and Mexico are poised to emerge as the primary beneficiaries, and New Zealand is also set to gain, albeit constrained by limited production and export expansion.

Brazil is anticipated to once again present substantial volumes to meet the quota for non-specified countries early in 2024. “We expect Brazil to set a new production record in 2024, with growth of 1% to 2% year over year. The increase in production will support what we expect to be a 2% to 3% increase in export volumes,” Gidley-Baird said.

Balancing this increase will be the expectation that Chinese imports will increase at a slightly faster pace – likely above 5% – in 2024 due to the demand recovery. “We expect Chinese demand to recover further in 2024, mainly driven by foodservice. This increase in demand will also support increased import volumes from Argentina, which we believe could increase by 5% to 7% year over year in 2024.”

Trends to watch

The ongoing slow economic recovery will limit consumers’ expenditure and likely curb their spending on beef, also in 2024. It is possible that 2024 will see margins in beef supply chains being squeezed to manage higher prices and accommodate the consumer.

The implementation of the EU’s Regulation on deforestation-free products in 2024 may impact beef import flows. Cattle numbers in the EU have declined through 2023, which Rabobank said will lead to lower EU beef production of 1.5% in 2024. This could have broader implications across the whole beef trade complex.

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