Rural
30 November, 2023
Aussie beef on the rise
Australian beef production is bucking the trend of global declines and lifted last quarter.
According to a recent report released by Rabobank, southern hemisphere beef-producing nations, including Australia, are continuing to increase production volumes, despite a global trend of production decline.
The agribusiness banking specialist said while increases in production have been made in Australia and Brazil, this has not been enough to off set the production declines in Europe and the United States.
Rabobank says global beef production across monitored markets is expected to decline one per cent year-on-year in 2023, and they forecast that 2024 will play out in a similar fashion.
The report says the beef sector is seeing ongoing strong consumer demand in the US – although this may be weakening – accompanied by reduced cattle and beef supplies.
But in Asia, weak demand and high inventory levels are testing the market.
The bank expects North American cattle prices to continue to track at high levels, while southern hemisphere prices remain soft.
Australian cattle prices dropped dramatically (down 28 per cent since June) while New Zealand and Brazil also saw prices fall, but by smaller amounts, the report said. Cattle prices in the US were steady, while Canadian prices rose three per cent between June and October.
Rabobank expects the ongoing slow global economic recovery will limit consumers’ expenditure and likely curb their spending on beef next year.
The quarterly report said in 2023, many markets, particularly in Asian countries, did not experience the growth in consumption expected as economies recovered from COVID, and it was clear consumers were being much more cautious in their purchase decisions.
Rabobank expects these conditions will continue into 2024 and the report said indications from China are that the type of products in demand is changing, with more attention being paid to value-for-money products, and less to premium ones.
Rabobank’s senior animal proteins analyst, Angus Gidley-Baird, said for the Australian beef sector it appears the bottom of the market has been hit.
“We believe that the producer uncertainty that was causing prices to drop has eased and, as we head toward summer, producers will be more certain about what stock numbers they will run, returning some stability to the market,” he said.
