Global beef supply is expected to decline in 2025
The shift in supply could disrupt trade flows throughout the new year, the report said.
Rabobank estimates that supply will be down by 500,000 tonnes compared to last year, or 1%. The main countries to see production declines are Brazil and the United States, but reductions are also forecast in China, Europe and New Zealand. Australia could be the only country among the top 10 beef producers to see year-on-year increases in 2025.
While North American cattle prices have been high for nearly two years as a result of lower cattle numbers and strong consumer demand, cattle prices in other regions have been low. This trend has begun to change as global beef declines begin to strengthen cattle prices in South America, Australia and New Zealand.
Rabobank said beef trade is expected to change "dramatically" as major global beef markets shift their available supply. According to Angus Gidley-Baird, senior animal protein analyst at RaboBank, Australian beef producers will increasingly rely on exports to absorb higher domestic production, while Brazil will see global markets as a better demand opportunity compared to weak domestic demand.
While a contraction is expected, beef production has the potential to swing if patterns change. U.S. producers are waiting for more reliable rainfall to rebuild the herd. Recent reports of seasonal cooling could be the change in weather needed to end the multi-year drought. Meanwhile, Brazilian production is slowing because of delays in rainfall. Australia has maintained adequate rainfall for a few years, but the threat of drought could lead to higher production.
According to Rabobank, the climate in 2025 is likely to remain as it is. The latest El Niño-Southern Oscillation models predict that weather conditions will persist through the first quarter of 2025 before transitioning to a more neutral pattern by mid-year.
Gidley-Baird said this would support Australian beef production.
"In addition, year-over-year declines in U.S. beef production will remain relatively small as the U.S. beef cattle recovery remains stalled by slower development of replacement heifers", he added.
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