Herd contraction in the world's largest beef producing regions is going to lead to the first global beef supply reductions since the pandemic and will alter trade flows.
This is according to a new RaboResearch report, which suggests that global beef markets will navigate declining global production and uncertainty in 2025.
Brazil and the US are likely to lead beef production declines in 2025, but reductions in China, Europe, and New Zealand are also likely.
While North American cattle prices have been high for close to two years as a result of the lower cattle numbers and strong consumer demand, other regions have experienced low cattle prices.
This trend has started to change as global beef declines start to firm up support for cattle prices in south America, Australia, and New Zealand.
With available supplies altered across the top global beef markets, the report expects beef trade to shift dramatically.
Angus Gidley-Baird, senior analyst for RaboResearch, said Australian beef producers will increasingly depend on exports to absorb stronger domestic production.
"Brazil will see global markets as a better demand opportunity compared to lacklustre domestic demand," he added.
"Beef production has the potential to swing dramatically if weather patterns change. US producers are waiting on more dependable precipitation to rebuild the herd, and Brazilian production is being slowed by rain delays.
"Australia has maintained relatively adequate precipitation for a few years, but the threat of dryness could lead to more production."
The status quo is likely to be maintained for next year's weather, according to the RaboResearch report.
The latest El Niño models are predicting La Niña weather conditions to persist into Q1 2025 before a transition to a more neutral pattern by midyear.. which will support Australian beef production.
“Furthermore, year-over-year declines in US beef production will remain relatively small, as US cow herd rebuilding remains stalled by slower replacement heifer development,” concluded Mr Gidley-Baird.
