TL;DR:
- Global beef demand is expected to stay steady in 2024, despite economic challenges and shifts towards more affordable proteins.
- Australia and Brazil will see increases in beef production, compensating for declines in Europe and the United States.
In a recent report by Rabobank, it’s predicted that global beef demand will likely maintain its current level through 2024, amidst economic pressures and a consumer trend towards cheaper protein options. Angus Gidley-Baird, a senior analyst at Rabobank, highlighted that with expected limited or negative real wage growth and a higher cost environment, beef consumption could at best remain steady, with potential regional variations.
Since 2019, beef prices have escalated across most markets, further strained by inflation in 2022 and 2023, which has increased the cost of living and pressured consumer budgets. This has led to foodservice and retail operators promoting more value-based options to cater to the consumer shift towards affordability.
Despite these challenges, the demand for beef remained relatively stable in 2023, supporting consumption levels. However, the economic outlook for 2024 suggests a slowdown in GDP growth rates and a rise in unemployment rates across many countries, which could impact beef demand.
The report also forecasts changes in global beef production, with increases expected in Australia and Brazil, offsetting declines in Europe and the United States. Australia is set to see a 10% to 15% rise in cattle slaughter volumes in 2024, with exports increasing due to higher inventory levels.
In contrast, Europe experienced a 3.5% decrease in beef production year-over-year from January through November 2023, with only Germany and the Netherlands reporting slight increases.
The United States faces a significant reduction in its cow herd, reaching its smallest size since 1961, with cattle slaughter rates 12% below the previous year’s levels in the early weeks of 2024. This decrease in domestic supply could lead to the U.S. setting beef prices in the global market, potentially drawing increased volumes from other major exporters like Australia, New Zealand, Brazil, Canada, and Mexico.
Rabobank raises questions about the future of beef prices and consumption, pondering whether prices can be maintained or increased to compensate for reduced consumption, or if they need to be lowered to boost demand. The report suggests a cautious outlook for beef imports in China for at least the first half of 2024, with prices continuing to fall through January, traditionally a peak demand season due to the Spring Festival.
This comprehensive analysis by Rabobank provides a clear picture of the global beef market’s current state and its potential direction in the coming year, highlighting the balance between production, demand, and economic factors influencing the industry.
