The beef production is expected to decrease in the second half of 2024, as stated by Rabobank in its recent forecast. Especially in Europe and the United States, the supply is declining, although the availability in those markets is higher than initially expected. Meanwhile, the supply remains strong in the Australian and Brazilian markets, according to the bank.
The bank reports a decrease in production in the United States and Europe. Meanwhile, beef production is increasing in Brazil, Australia, and China, although the increase in these countries is not sufficient to offset the decline in Europe and the United States. The Rabobank expects two parallel price developments. Prices will remain at record highs in the North American market. In the rest of the world, the price is expected to remain relatively stable, according to the bank.
Strong European Beef Market
The European beef market is strong. In the European Union and the United Kingdom, the bank notes an 8.4% increase in supply in the months of January and February. The production increased the most in Poland, where it rose by 21.5%. Spain followed with a 12% increase, and the Netherlands saw a production increase of 10.9%.
In Europe, despite an increase in production this year, prices remain high. According to Rabobank, this is due to strong demand. An indication of this is that imports have increased despite strong domestic production. Imports in the European Union and the United Kingdom increased by 5%. Australia (+58%) and New Zealand (83%) benefited the most. Brazil remained the main export market, although imports from the South American country decreased by 13% compared to the previous year.
Meanwhile, beef exports to Turkey are increasing as the country has opened its borders for imports due to high meat prices. Additionally, the bank notes a greater export to Ghana and Bosnia and Herzegovina.
American Supply Higher Than Expected
Meanwhile, beef prices in the United States are at record highs. In April, the USDA determined that the average price for fresh beef had risen to $17.53 per kilogram. Due to winter drought, the US slaughter rate in the first quarter decreased by 6% compared to the same period a year earlier.
However, the supply is better than expected. Contrary to market expectations, carcass weights have increased. Additionally, imports compensated for a lower number of slaughters. Net imports in the first three months of the year increased by 154% compared to 2023. Due to these two factors, beef supply in the United States in the first quarter was only 1% lower than in the first three months of 2023. According to Rabobank, there are early signs that the supply is improving. Based on USDA slaughter data, Rabobank concludes that beef supply in the second quarter may increase compared to the same period in 2024.
Brazil Focuses on China, Australia on the United States
Meanwhile, Brazilian beef exports reached a record high in April. In April, 237,000 tons of beef were exported, a 78% increase compared to the previous year, breaking the export record of December 2023 of 235,000 tons. China accounted for 45% of the volume. Favorable weather led to an increase in slaughter rates in the first and second quarters. Although the rainy season is late, the size of the livestock herd remains above the thirty-year average. However, the late rain will cause a small dip in the third quarter before production increases again.
The Australian market is balanced according to Rabobank. Compared to the previous year, the slaughter rate has increased by 15%. The growing number of slaughters is mainly due to the substantial Australian cattle herd. Due to weak demand from the Asian market, slaughterhouses are not pushing for more slaughters, keeping prices stable. However, exports have reached a high level, especially due to an increase in exports to the United States. In April, exports were 89% higher than in the same month in 2023.
