New benchmarks in global beef markets, including Australia

The first half of 2024 was stronger than had been expected in global beef markets, with record production, export and import volumes in a number of key markets, according to an international industry report.

The Global Beef Quarterly, prepared by agribusiness banking specialist, the Rabobank Group, says that Australian beef production has remained high and exports hit new records as seasonal conditions continue to be favourable in most cattle-producing areas of the country.

“Dry conditions in southern areas in the first half of the year have limited the numbers of heavy finished grass-fed cattle, but good seasonal conditions in the north continue to support high slaughter numbers,” said report lead author, RaboResearch senior animal proteins analyst, Angus Gidley-Baird.

“Weekly Australian cattle slaughter numbers remain around 140,000 head per week, up 20 per cent on the five-year average. Given our expectations for the number of cattle in the system, we believe slaughter numbers will continue at these rates into the latter part of the year.”

The report says Australian beef export volumes in July 2024 were the largest volumes ever exported, passing previous peaks in 2019 and 2015. Cattle prices also rose sharply in July, particularly finished steer and cow prices which lifted 15 per cent and 32 per cent respectively.

If US import prices peaked again in Q4 – as was a typical pattern – Rabobank would expect to see Australian cow and finished steer prices creep up further

Meanwhile, beef markets had seen record production and exports in Brazil in quarter two (Q2), while China had a record volume of imports in the first half of the year. Production volumes in the United States were higher than expected and prices in Europe had remained “remarkably strong”.

The report says that beef markets are waiting for signals of what is expected to unfold – most significantly a contraction in US production, improved cattle prices in Brazil and a possible reduction in consumption in the US following both the end of summer grilling season and persistent high beef prices.

Global beef production looks set to lift slightly in quarter four (Q4) of 2024 compared with Q3, before falling into 2025, Rabobank says.

“Year-on-year though, higher production volumes in Australia expected in Q4 2024 (up four per cent on quarter three 2023) do not offset declines in Europe (down one per cent), New Zealand (down seven per cent), Brazil (down three per cent), the US (down five per cent) and China (down two per cent),” Gidley-Baird said.

Notwithstanding these declines, global beef production in Q4 is still expected to be 3.8 per cent higher than the 10-year average.

China – the world’s largest beef importer, with 34.6 per cent of total global trade in 2023 – has dominated global markets for the past five years.

But now, slowing economic growth and a declining population is seeing changing consumer trends in China which are impacting the beef product mix.

“The Chinese beef market still has ample growth potential, given per capita consumption is lower than other developed Asian countries,” Gidley-Baird said. “However, new consumer trends are emerging which will change consumption. Overall, the premiumisation trend is slowing and consumers are pursuing both quality and value.”

That current trend of ‘value for money’ in China gave South American beef suppliers a clear competitive advantage in low- to medium-end markets, while products from Australia and the US held a position in medium- to high-end markets – although all producers were currently seeing lower prices than a year ago.