November 27, 2023
Brazil poised for record beef production in 2024, despite global market shifts
In a recent report by Rabobank, Brazil is anticipated to achieve record levels of beef production in 2024, even as global beef markets undergo significant shifts, Agriland reported.
The report highlights a divergence in global beef markets, with the United States experiencing high prices and declining production, while the southern hemisphere sees increasing production coupled with lower prices.
Rabobank's Angus Gidley-Baird, senior analyst for animal protein, noted that opposing positions in cattle cycles, influenced by weather patterns, have led to a redistribution of beef trade, a trend expected to persist in 2024. The contractionary phase in the US, following extended herd liquidation, is expected to result in decreased production. It could potentially necessitate increased imports and reduced exports.
On the other hand, the expansionary cycle in Australia, combined with anticipated drier conditions and some liquidation of surplus stock, is projected to drive up production volumes. Brazil is also expected to see continued production growth, leading to increased exports from these countries.
The report found that the volume balance for major beef-producing and consuming regions globally will remain relatively constant in 2024. While aggregated production volumes in major producing countries are expected to remain similar to those in 2023, a 1% decline in aggregated consumption levels is anticipated. This decline will be partially offset by gains in countries like China, South Korea, and Brazil.
The US, transitioning to a net import position in 2023, is poised for significant changes in 2024, with anticipated contractions in production and consumption, solidifying its net import status. Australia and Mexico are expected to be primary beneficiaries, with New Zealand also gaining, albeit constrained by limited production and export expansion.
Brazil is forecasted to set a new production record in 2024, supporting a 2% to 3% increase in export volumes. The report suggests that Chinese imports may increase above 5% in 2024, driven by demand recovery, impacting beef import flows. The slow economic recovery may limit consumer expenditure on beef, and the implementation of the EU's regulation on deforestation-free products in 2024 could influence beef import dynamics.
Despite a 30% year-on-year fall in live cattle prices in Brazil in September 2023, the report anticipates a record beef production year in 2024, supporting local consumption recovery. But slow economic recovery may lead to squeezed margins in beef supply chains to manage higher prices and accommodate consumer demands.
- Agriland
