Global Beef Numbers Shrink

By Jennifer Carrico, DTN Senior Livestock Editor

The global beef market continues to show strong prices with smaller production numbers worldwide. But at some point, that is bound to turn, and it may be due to shifts in the beef trade, according to a new report from Rabobank.

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

The U.S. herd continued to contract, mostly due to drought and its aftermath. Moving forward, if these conditions improve, this reduction in numbers may slow.

Europe has seen a similar contraction in its cow herd, and as a result, there are firm beef carcass prices. In other areas of the world, however, cattle prices are falling or have reached the bottom. In China and Japan, for example, beef prices have declined due to weak demand and a sufficient supply. Imports have slowed to both of these regions, a trend that is expected to continue into 2024. Brazilian live cattle prices declined with record consumption. Australia and New Zealand cattle prices have likely reached bottom, but slaughter still rises.

"The volume balance for the major beef producing and consuming regions of the world will remain relatively constant in 2024," Gridley-Baird said. Increases in production in countries such as Australia, Brazil, and Mexico will offset declines in Canada and the U.S.

LOOKING TOWARD 2024

Rabobank 's report anticipates a 4.5% contraction in beef production and a 3% decrease in U.S. beef consumption in 2024. As a result, an increase in imports is expected, with those most likely to come from Australia, Mexico, and New Zealand. New production records are expected for Brazil, said Gridley-Baird, with growth of 1% to 2% year over year, supporting a 2% to 3% increase in export volumes.

"We expect Chinese demand to recover further in 2024, mainly driven by foodservice," he added. "This increase in demand will also support increase import volumes from Argentina, which could by 5% to 7% year over year in 2024."

A slow economic recovery would limit consumers' expenditures and curb their spending on beef. The latest USDA all-fresh beef retail prices continue to show increases to record-high prices. Cattle on feed numbers continue to increase as well, while cattle inventory declines compared to the previous year. Market prices for nearly all classes of cattle and calves remain 20% to 30% higher than year-ago levels.

U.S. herd rebuilding remains on hold for now, and cow slaughter continued to be high for 2023. Heifers account for over 40% of calf and feeder cattle sales, which shows for most producers herd rebuilding isn't happening as of yet.

Jennifer Carrico can be reached at jennifer.carrico@dtn.com

Follower her on X, formerly known as Twitter, @JennCattleGal

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