Consumer demand for beef set to dip slightly in 2024
The ongoing slow economic recovery will limit consumers’ expenditure and likely curb their spending on beef next year, said the analysts. It is possible that 2024 will see margins in beef supply chains being squeezed to manage higher prices and accommodate the consumer, they added.
The implementation of the EU’s Deforestation Regulation (EUDR) next year may impact beef import flows, noted the Rabobank team.
“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.”
Beef cattle production levels are forecast to drop in the US, after prolonged herd liquidation, but are expected to expand in Australia and to continue to rise in Brazil, according to Rabobank’s global beef quarterly Q4 2023.
Indeed, 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.”
As a result, exports from Australia and Brazil will increase, said the team.
“We expect Brazil to set a new production record in 2024, with growth of 1% to 2% YOY. The increase in production will support what we expect to be a 2% to 3% increase in export volumes,” commented Angus Gidley-Baird, senior analyst, animal protein, Rabobank.
Feed trends
New Zealand is also set to gain, though it is somewhat constrained by limited production and export expansion. “Good feed levels and favorable farmgate prices are supporting returns.”
And Mexico may emerge as another beneficiary of US production contraction. There are concerns though around drought potential and relatively high feed costs in that market.
Chinese demand
Chinese imports are also predicted to increase at a slightly faster pace – likely above 5% – in 2024 due to the demand recovery.
“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% YOY in 2024.”
