Global beef markets are continuing to hold relatively strong at present, though there is evidence of decreasing consumer confidence due to inflation, according to Rabobank.
According to the banking and financial services company’s latest beef market reports, most beef retail prices (in domestic currencies) continued an upward trend in the second quarter (Q2) of 2022, or remained steady, with most sitting between 5% and 11% higher than in Q2 of last year.
However, evidence is building that slowing economies and rising inflation are hampering confidence.
According to Rabobank, beef markets are, in general, resilient to changes in economic conditions.
“However, we see movement within supply channels and price points that tend to favour cheaper options, such as ground beef and quick service restaurants, over more expensive cuts and consumption channels,” said Angus Gidley-Baird, senior analyst for animal protein at Rabobank.
Over the past year, tight global supplies and strong consumer demand pushed global beef prices to record highs over the past year.
However, Rabobank said that the “spillover effects” of easing Covid-19 restrictions – which it said include “rampant inflation and slowing economic growth” – are starting to impact consumer spending habits.
“We expect consumption volumes of trimmings to remain strong and potentially increase in [the second half] of 2022, as consumers are expected to trade down to lower-value beef cuts and cheaper proteins.”
According to Rabobank, cattle markets remain favourable, supported by either seasonal conditions or by strong demand.
However, cattle prices in some countries are experiencing a decline, despite the support provided by many of these countries’ currencies depreciating against the US dollar over the same time period.
Among the major producing and exporting countries, growth is expected to see a slight rise through the third quarter (Q3) and quarter four (Q4) this year, as higher production in the US and Brazil dominates the market.