June 10, 2024


Global beef production to decline in late 2024, supporting price increases


Global beef production is projected to decrease in the second half of 2024, providing support to global prices, according to a new report by agribusiness banking specialist Rabobank, Beef Central reported.


In its Global Beef Quarterly Q2 2024, Rabobank forecasts a slight increase in global beef production for the second quarter compared to the same period last year but anticipates year-on-year declines in the third and fourth quarters.


The report highlights that while beef production is expected to rise in Australia and Brazil during the latter half of the year, these gains will be outweighed by contractions in Europe, the US, and China.


Angus Gidley-Baird, RaboResearch senior animal protein analyst and report lead author, said contractions in beef production in Europe and the US are expected to be too significant for the increases in Australia and Brazil to offset. China's production will rise in the second quarter before contracting later in the year.


Regarding global pricing, Gidley-Baird noted a two-speed cattle market, with North America nearing record highs due to reduced local production, while other regions remain more subdued.


He said Europe finds itself in the middle ground, despite a recent uptick in production.


The report indicated that these regional disparities are starting to affect international trade flows, with the US increasing its import volumes and major Asian markets maintaining steady import levels.


In the Australian beef market, rising import demand from the US is beginning to have an impact. Gidley-Baird said the contraction in US beef production is starting to flow through to Australian markets. Australian export volumes to the US were up 117% in April, and year-to-date volumes are up 89%. However, export volumes to other major markets are not showing the same increase.


The reduction in US production, especially the decline in cull cow and bull slaughter, offers opportunities for Australian lean trimmings export volumes, he noted. This also opens opportunities for Australian exports to key Asian markets where the US is a comparable supplier.


While export volumes to the US and US import prices have increased, this has not fully translated to Australian cattle prices. Cattle supply volumes in Australia, ongoing soft demand in Asian countries, and relatively full supply chains are reasons for not seeing prices transfer through, Gidley-Baird explained.


The report states that first-quarter Australian slaughter and production volumes increased by 17% and 15% year-on-year respectively, reflecting the higher number of cattle in the system after consecutive years of rebuilding activity.


Volumes in the first quarter of 2024 were like those in the last quarter of 2023, indicating a sustained increase in Australian beef production. Without any strong demand or supply forces on the horizon, Rabobank believes Australian cattle prices will remain around current levels into the third quarter.


Rabobank continues to monitor animal disease risks worldwide due to their potential impact on the global beef sector. The recent transmission of H5N1 avian influenza to dairy cattle in the US is one such issue, although no cases have been reported in beef herds and beef food safety remains uncompromised.


Meanwhile, Brazil recently declared itself free from foot-and-mouth disease without vaccination. Official recognition by world animal health authorities could significantly enhance Brazil's trade prospects.


The report also discusses the growing demand for climate disclosures in beef supply chains, presenting both opportunities and challenges. Beef companies are facing a balancing act in responding to new sustainability requirements and capitalizing on associated opportunities while managing the risk of moving too early in a rapidly evolving market and regulatory environment.


Gidley-Baird said the beef industry faces a particular challenge with its 'scope 3' emissions, which are substantial yet difficult to measure. Large beef companies will need to navigate the complexities of collecting and reporting accurate emissions data under reporting regulations.


At the farm level, carbon calculators and measurement tools will become important to facilitate a bottom-up approach to measurement, he added.


-      Beef Central

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