The first half of 2024 has surpassed expectations in the global beef market, with record-breaking production, export, and import volumes in key countries, according to Rabobank’s recently released Global Beef Quarterly.
Australian beef production continues to thrive, with exports hitting new highs as cattle prices rise, the agribusiness banking specialist notes in its quarter three report.
Angus Gidley-Baird, Senior Animal Proteins Analyst at RaboResearch, highlighted that Brazil set records for beef production and exports in the second quarter. At the same time, China achieved a record volume of imports in the first half of the year. In the US, production volumes exceeded predictions, and European beef prices remained “remarkably strong.”
Looking ahead, the report predicts a potential contraction in US beef production, improved cattle prices in Brazil, and a possible reduction in US consumption following the end of the summer grilling season and persistently high beef prices.
Cattle prices vary significantly across markets. North American prices remain high, while southern hemisphere prices, though lower than those in the US, show some recovery. Brazilian prices, however, have declined.
Global Production Trends
Global beef production is expected to see a slight increase in the fourth quarter of 2024 compared to the third quarter but will likely decrease into 2025. Despite higher production volumes in Australia (up 4% on the previous year), this increase won’t fully offset declines in Europe (-1%), New Zealand (-7%), Brazil (-3%), the US (-5%), and China (-2%).
Overall, the report forecasts that global beef production in the fourth quarter will be 3.8% above the 10-year average but anticipates a contraction in 2025 due to reduced production in the US and Brazil.
Shifts in Chinese Beef Consumption
China, the world’s largest beef importer, has influenced global markets significantly over the past five years. However, slowing economic growth and a declining population are altering consumer trends. Although the market still holds growth potential, consumers are increasingly focused on value for money, with a shift away from premium products towards more cost-effective options.
Chinese consumers are now leaning towards value cuts such as shin, shank, and belly, while interest in luxury beef cuts like wagyu has waned. Imported beef, particularly from South America, has a cost advantage in low to medium-end markets, whereas Australian and US beef remain prominent in medium to high-end markets.
Australian Beef Outlook
Australian beef production and exports remain robust, supported by favourable seasonal conditions in most cattle-producing regions. Despite dry conditions in southern areas limiting the availability of heavy finished grass-fed cattle, strong seasonal conditions in the north continue to drive high slaughter numbers, which are up 20% on the five-year average.
July 2024 saw Australian beef export volumes reach an all-time high of 129,998 metric tonnes swt, surpassing previous peaks from 2019 and 2015. Notably, exports to the US and Japan reached their highest levels since December 2015 and March 2020, respectively. However, exports to China have declined.
Australian cattle prices surged in July, with finished steer and cow prices rising 15% and 32% respectively. While prices have since stabilised, they remain on an upward trajectory. If US import prices peak again in the fourth quarter, Australian cow and finished steer prices may see further increases. However, high cattle volumes and a steady inventory are expected to keep restocker and young cattle prices stable but with less potential for significant gains.
