USDA forecasts decline in global beef production by 2025
This is according to the latest report from the United States Department of Agriculture (USDA), which indicates that after five years of uninterrupted growth, reaching a record production of 61.4 million tons this year, the cycle change that many international analysts have already been anticipating is finally taking place.
In the case of Brazil, the first significant drop in production in ten years is expected, with a reduction of 100 thousand of the 500 thousand additional tons that it is bringing to the market this year, and will go from 11.85 million this year to 11.75 million expected for 2025. The reduction of its livestock stock for the second consecutive year generates limitations that will force it to slightly moderate its export expansion.
In the case of the European Union, a reduction of 100 thousand tons of production to 6.5 million is also expected, although with a much smaller impact overall in the face of an increasingly restricted production sector.
The big shift on the global stage is in the United States. By 2025, the USDA expects beef production in the country to decline by 4% due to a shortage of cattle stocks.
The decline in production, coupled with abundant exportable supplies in markets such as Argentine, Australia and Brazil, will boost import growth. This imbalance in production will cause the need for imports to rise again for the third consecutive year, reaching a record of two million tons, while exports will contract by 12%, reaching a low of 1.2 million tons.
This imbalance in the United States will create significant market opportunities for major beef suppliers.
The situation in the North American country is compounded by the forecast for Brazil, the world's leading exporter of beef, which is expected to see a significant drop in local production.
However, unlike the United States, Brazil has been showing significant export performance, compared to which this drop in production estimated at 100 thousand tons would only moderate its growth, maintaining a record of 3.6 million tons of exportable surplus, which would make up almost a third of world trade.
Overall, USDA expects global beef exports to remain largely unchanged in 2025 at around 12.9 million tonnes.
However, the scenario that the United States is presenting, with its import demand increasing to levels never seen before in the face of a global decline in world production, will offer great opportunities for the sector.
Argentine production will be driven by increased international demand and new domestic policies implemented that seek to encourage shipments by reducing export taxes on certain beef products.
EU production is expected to decline by 2% as a combination of economic headwinds and an uncertain regulatory environment discourages investment in the livestock sector.
In Australia, production is expected to rise by 2% to a record 2.6 million tonnes as global consumption increases.
Demand in 2025 will also be supported by a 1% increase in imports from China, as well as small quotas from South Korea, Taiwan and the UK.
Chinese purchases next year will account for 34% of global beef imports, followed by the US. For 2025, the USDA expects moderate growth in Chinese beef consumption of 0.3% to 11.587 billion tonnes, with domestic production declining from 7.8 million to 7.78 million tonnes. Meanwhile, Chinese imports are expected to rise from 3.775 million tonnes this year to 3.825 million tonnes in 2025.
A tight global balance such as that expected from 2025 onwards will support an upward cycle of beef prices.
Beyond the general recovery in meat prices, the market will also see a change in the profile of importers. On the one hand, with China slowing its growth to 3.8 million tons from the 3.9 million estimated for 2024 and, on the other, with the US reaching a record of more than 2 million tons in imports.
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