Global beef production is expected to contract in the second half of 2024, providing support to global prices, according to a newly-released report by agribusiness banking specialist Rabobank.
The recently-released Global Beef Quarterly Q2 2024 projected global beef production for quarter two was forecast to be marginally higher than in the same quarter last year, but volumes for quarters three and four were expected to fall year-on-year (YOY).
Rabobank expected more beef to be produced in Australia and Brazil in the second half of this year, however these increases were likely to be outweighed by production contractions in Europe, the US and China.
RaboResearch senior animal protein analyst and report lead author Angus Gidley-Baird said contraction in US beef production was starting to flow through to Australian beef markets.
“Australian export volumes to the US were up 117 per cent in April and year-to-date volumes to the US are up 89 per cent,” he said.
Meanwhile Mr Gidley-Baird said said export volumes to other major markets were not showing the same increase.
“The contraction in US production – particularly the reduction in cull cow and bull slaughter – provides opportunities for Australian lean trimmings export volumes,” he said.
“It also provides opportunities for Australian volumes into key Asian markets where the US is a comparable supplier to Australia.”
Mr Gidley-Baird said while export volumes to the US and US import prices had increased, this had not completely flowed through to Australian cattle prices yet.
“Cattle supply volumes in Australia, ongoing soft demand in Asian countries and relatively full supply chains, we believe, are the reasons for not seeing prices transfer through,” he said.
The report said first-quarter Australian slaughter and production volumes had seen a 17 per cent and 15 per cent increase year-on-year respectively, reflecting the increased number of cattle in the system following consecutive years of rebuilding activity.
The Rabobank report noted volumes in the first quarter of 2024 were similar to those in the last quarter of 2023 – illustrating a sustained increase in Australian beef production.
Without any strong demand or supply forces on the horizon, Mr Gidley-Baird said the bank believed Australian cattle prices would continue to trade around current levels into the third quarter.
The report highlighted Rabobank’s continued monitoring of animal disease risks in different locations around the world.
Mr Gidley-Baird said the recent transmission of H5N1 avian influenza to dairy cattle in the US was one such issue, although no cases had been reported in beef herds and beef food safety remained uncompromised.
“Meanwhile Brazil recently declared itself free from food-and-mouth disease without vaccination,” he said.
“Official recognition by world animal health authorities could significantly enhance Brazil’s trade prospects.”
The Rabobank Beef Quarterly also highlighted a growing demand for climate disclosures around the world was edging into beef supply chains, presenting both opportunities and challenges.
Mr Gidley-Baird said the beef industry was facing a particular challenge, with its ‘scope 3’ emissions, which were substantial, yet difficult to measure.
“Scope 3 supply chain emissions represent a significant portion of food retailers’ greenhouse gas emissions,” he said.
“Under the reporting regulations, large beef companies will be required to navigate the complexities of collecting and reporting accurate emissions data.
“At farm level, carbon calculators and measurement tools will become important to facilitate a bottom-up approach to measurement.”
