Brazil is expected to reach record levels of beef production in 2024, according to a new report today (Tuesday, November 21), although export volumes are expected to decline.

According to the Rabobank report, global beef markets continue to be split into two distinct parts, with high prices and contracting production in the US and increasing production and low prices in the southern hemisphere.

Angus Gidley-Baird, senior analyst – Animal Protein at Rabobank said: “Opposing positions in cattle cycles, exaggerated by weather patterns, have caused a redistribution of beef trade that will continue in 2024.”

The contractionary phase in the US, after prolonged herd liquidation, will see production levels decline, the report indicates.

According to Gidley-Baird, this will generate the need for increased imports and will reduce exports. If weather conditions improve, this contraction may be even more pronounced.

Meanwhile, the expansionary cycle in Australia, coupled with expected drier conditions and some liquidation of surplus stock, will see production volumes rise, according to Rabobank.

Brazil’s production will also continue to rise. As a result, exports from these two countries will increase, the report stated.

“The volume balance for the major beef producing and consuming regions of the world (that we track) will remain relatively constant in 2024,” Gidley-Baird continued.

The aggregated production volumes of the major producing countries are expected to remain similar to the expected volumes in 2023.

Increases in production in countries such as Australia, Brazil, and Mexico will offset declines in Canada and the US.

Meanwhile, aggregated consumption levels are expected to drop by 1%. Declines in countries like Canada and the US will not be fully offset by gains in countries such as China, South Korea, and Brazil.

Adapting trade patterns to align with shifts at the country level will be essential, Rabobank has said.

The US is poised for significant changes. Having transitioned to a net import position in 2023, Rabobank anticipates a 4.5% contraction in production and a 3% decrease in consumption in 2024, thereby amplifying the net import status.

Australia and Mexico are poised to emerge as the primary beneficiaries, and New Zealand is also set to gain, albeit constrained by limited production and export expansion.

Beef from Brazil

Brazil is anticipated to once again present substantial volumes to meet the quota for non-specified countries early in 2024.

Live cattle prices in Brazil fell by 30% in September 2023, year-on-year, but the report states that record beef production should help local consumption to recover.

Even with lower prices, annual shipments are falling. Source: Secex, Rabobank 2023

“We expect Brazil to set a new production record in 2024, with growth of 1% to 2% year-on-year,” Gidley-Baird added.

“The increase in production will support what we expect to be a 2% to 3% increase in export volumes.”

Balancing this increase will be the expectation that Chinese imports will increase at a slightly faster pace – likely above 5% – in 2024 due to the demand recovery, the bank has indicated.

“We expect Chinese demand to recover further in 2024, mainly driven by foodservice. This increase in demand will also support increased import volumes from Argentina, which we believe could increase by 5% to 7% year-on-year in 2024.

Meanwhile, the ongoing slow economic recovery will limit consumers’ expenditure and likely curb their spending on beef, also in 2024.

Rabobank said that it is possible that 2024 will see margins in beef supply chains being squeezed to manage higher prices and accommodate the consumer.

The implementation of the EU’s regulation on deforestation-free products in 2024 may impact beef import flows, according to the report.

Cattle numbers in the EU have declined through 2023, which will lead to lower EU beef production of 1.5% in 2024.

This could have broader implications across the whole beef trade complex, according to Rabobank.