By Garra - 04/12/2023 in Brazil and World

Rabobank sees two-party story in global beef market in 2024 

The global beef market tells two distinct stories, according to the latest of Rabobank’s quarterly reports.

On one hand, there is strong domestic demand in the U.S. market, which internal supply, hampered by drought, cannot meet. This is compounded by weak demand and high stock levels in the Asian continent. In contrast, major beef producers in the Southern Hemisphere continue to increase their production volumes, the bank states. 

Matching the two-part story of global beef markets, North American cattle prices remain at high levels, while in Southern Hemisphere countries, prices are still soft.

This scenario will lead to a 1% decrease in global beef production in 2023 compared to the previous year, as increases in Australia and Brazil will not be enough to offset reductions in European countries and the United States. This trend should continue into 2024.

In Brazil, production is expected to increase by 1% to 2% in 2024. “The rise will be driven by the international market, expectations of increased Chinese imports, and the recovery of domestic consumption, which is expected to improve by 0.5% to 1.5% compared to 2023,” the bank said.

The main destinations for Brazilian beef are expected to remain China, the United States, and Hong Kong, which purchased 63% of the total volume of beef protein exported by Brazil in the first nine months of 2023.

In China and the U.S., Brazil is expected to face increased competition from New Zealand and Australia, which are expected to grow production by 10% in 2023 and 4% in 2024, respectively, according to the Rabobank report.

“Even with the expectation of a further reduction in North American supply in 2024, which should increase demand in the external market, the sharp drop in Australian beef prices may boost its exports and cool Brazilian expectations of seeing any change regarding the sales quotas to the U.S.,” Rabobank said.

Brazil exports beef to the U.S. within an annual quota of 65,000 tons divided among several countries. In 2023, this quota was reached by the end of the first quarter, and with the incidence of a 24.6% tariff, volumes have been reduced practically to half, limiting the possibility of increasing the volumes shipped.

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