AHDB: Effects of the contracting herd in the US are felt globally
Beef production in the United States continues its downward trend. For 2024 as a whole, current forecasted production is -1.2% below 2023’s lowered levels, with the USDA outlook indicating further declines into 2025. However, the outlook has improved slightly compared to previous estimates, supported by good carcase weights. Retail beef prices have reached record highs due to robust demand. In turn, farmgate prices have been especially strong.
Import levels in 2024 are predicted to reach a record high, to increase by 11.2% year-on-year (YoY). Benefitting from this market so far this year has included Australia, Uruguay, Argentina, Canada, Brazil and New Zealand. The depletion in US domestic production is expected to lead to a 4.3% YoY reduction in exports over the whole of 2024.
Record production is forecasted for 2024 (+3.7% YoY) and good rainfall has helped to shorten cattle finishing times, allowing for a larger exportable surplus. Subdued prices have reflected the good supply.
April’s beef exports were the largest on record, with China being the largest destination for Brazilian beef. However, the CEPEA reported that supplies reduced in the first few weeks of July. Forecasts of a dry La Niña winter in Brazil is likely to dampen pasture raised beef supplies and feedlots are reportedly holding fewer animals, which may hinder exports somewhat in the second half of 2024. Although, record slaughter rates are expected to raise 2024 exports as a whole by 13.9% YoY.
Australia's production is forecasted to increase by 11.1% YoY in 2024, which reflects the ongoing rebuilding of the national herd over the past few years. The growth in the cattle herd is set to stabilise in 2024, according to the Meat & Livestock Australia’s (MLA) latest Cattle Industry Projections, as the herd enters a "maintenance phase". Robust youngstock numbers are expected to contribute to further production growth in 2025.
Although exports to China have reduced so far this year, overall exports have increased substantially thanks to demand from the US market. The decline in US production is expected to create further demand and develop the upward price direction. New Zealand cattle prices have been subdued but good feed levels have supported margins.
Chinese production is forecasted to see growth of 3.6% YoY. Large inventories, driven by strong growth in imports in 2023 and weaker-than-anticipated economic growth this year, have led to lower prices. These market drivers could dampen demand for imported product.
So far in 2024, beef production in both the EU and UK has been higher year-on-year, with most major EU producers reporting growth. Meanwhile, farmgate cattle prices have generally persisted at historically high levels, pointing to robust consumer demand and competition for cattle. EU beef exports have grown significantly against last year, driven particularly by Turkey, helping to keep product moving through the EU marketplace.
European Commission forecasts from earlier in the year suggested a 2.3% reduction in total 2024 production due to smaller herd inventories. However, the higher kill rates through the first part of the year could increase this outlook. Heifer and cow slaughter have been particularly elevated, which against a backdrop of declining breeding herd numbers could point to future tightening in the supply base. Indeed, Irish prime slaughter is projected to reduce by around 2% for 2024 as a whole based on cattle inventory.
Market drivers in the northern hemisphere have generally supported cattle prices so far in 2024, with the UK being no exception. AHDB latest beef market outlook forecasts UK beef production to be relatively stable this year at 903,000 tonnes, with slight growth in prime kill and lower cow kill. Similar to trends in the EU and Ireland, prime cattle slaughter was up YoY during the first half of the year, with robust prices pointing to sustained demand. However, data on youngstock populations points to supplies tightening up in the final quarter and into 2025.
This, coupled with supply dynamics in Ireland and the EU could suggest underlying support for cattle prices generally, as long as consumption remains stable.
Central to the Aussie Meat Academy are influential food industry professionals who are passionate...
“Looking at the United Kingdom alone, there are 3.9m Muslims and our research suggests that...
A record-breaking Gulfood attendance set the tone for the year, with tradeshows and exhibitions b...
