Global beef consumption tipped to flatline or dip marginally in 2024 – Rabobank Beef Quarterly

With limited or negative real wages growth expected in key economies around the world in the year ahead, global beef consumption will at best remain steady and possibly decline through 2024, according to a Rabobank’s latest Global Beef Quarterly report.

In the recently-released report, the agribusiness banking specialist says beef is generally considered a premium protein with a high price point and sales are often expected to suffer when economic conditions put pressures on consumers’ spending.

Report co-author Rabobank senior animal protein analyst Jen Corkran said this situation poses important questions for those in the supply chain around margins and trade.

“These include whether prices will be maintained or pushed higher to make up for the loss of consumption, or if retail prices will need to ease to encourage higher consumption,’ she said.

Media Release - Jen Corkran RaboResearch Analyst

Rabobank Senior Animal Protein Analyst, Jen Corkran

“In a market where beef production growth is limited, like the US for example, we may see consumers willing to tolerate higher prices at the expense of some consumption, thus maintaining demand.

“While, in a market with growing supply, such as Australia, lower prices may be needed to encourage consumption.”

The report says China’s import demand for beef will likely remain sluggish in 2024 – at least in the first half – and with US demand strength and lower domestic supplies, beef trade is already being diverted to the US.

“Brazil’s exports to the US in January 2024 were ahead of 2023 and Australian volumes were up 127 per cent year-on-year,” she said.

“If China’s recovery is better than expected, global beef markets could become quite tight, fuelling price rises.”

The Q1 Rabobank Beef Quarterly says although the prospects of increasing beef demand may not be strong, the bank retains a positive outlook on the market.

“US production is declining, and the country’s economic outlook is reasonable. And, as a result, we expect the US will likely lead the beef price-setting market,” Ms Corkran said.

“This is likely to draw increased volumes from Australia, New Zealand and Brazil, along with trade from Canada and Mexico. But value will become the predominant theme across most markets in order to retain those consumers faced with balancing the tighter economic conditions.”


What happened to global beef consumption in 2023?

“The relationship between price and per capita consumption gives a reasonable indication of beef demand given global indices comparing beef demand do not exist,” Ms Corkran said.

“And, as a general statement, global per capita consumption levels for beef have been flat or marginally lower over the last three years.”

Ms Corkran said this is in line with academic studies, which show consumer spending habits are influenced by beef prices and household incomes.

“On top of beef price rises through 2021 and 2022, the impact of inflation in 2022 and 2023 added to the cost of living, putting consumer budgets under pressure and changing meat spending patterns,” she said.

“In 2023 it became more common for foodservice and retail companies to note the change in consumption patterns, with consumers trending towards the cheaper price point options and companies promoting value-based propositions,” she said.


NZ update – Strong US demand driving optimism

The report says a “kind” start to summer with plenty of homegrown feed around for much of New Zealand has meant cattle slaughter numbers have been reasonably subdued to end 2023 and to kick off 2024.

“Provisional New Zealand Meat Board numbers indicate bull beef kill is down 3.9 per cent compared to the same period last year. Processors look to have held prices up in order to encourage numbers and maintain throughput,” Ms Corkran said.

The report said that total New Zealand beef exports in 2023 were up seven per cent by volume (to 511,680 MT) but down nine per cent in value (to NZD 4.4 billion) from the record levels of 2022.

“The lower value of New Zealand beef was reflective of the cost of living and economic pressures in some of our key markets – China especially – and the high levels of exports out of countries like Australia and Brazil,” Ms Corkran said.

Export data for 2023 also highlights the growing importance of the US as a destination for Kiwi beef exports.

“China and the US both accounted for 36 per cent of total New Zealand beef exports by value in 2023, with this comparing to 43 per cent and 26 per cent respectively in 2022.” Ms Corkran said.

“For the US market, this represented a 28 per cent increase in the value of exports year-onyear, while on a volume basis, exports were up by 46 per cent.”

Ms Corkran said this trend towards increased reliance on the US market as a destination for Kiwi beef exports had continued into early 2024.

“The value of New Zealand beef exports into the US market was up by 12 per cent in January 2024 compared to the same month in 2023, whereas the value of exports to China for the same period was back 19 per cent year-on-year,” she said.

“And Kiwi beef producers will again look optimistically towards the US this calendar year with New Zealand lean trimmings exports well positioned to fill gaps in US local supply.”

Ms Corkran said the AgriHQ North Island bull price is currently tracking above the five-year average and the bank anticipates resilient pricing for New Zealand beef in 2024.

“After plateauing in late December, prices have risen slowly back to NZ 580c/kg cwt by midFeb,” she said.

“Eyes will be firmly on the slaughter numbers coming in and whether/when the supply will match processing demand.

“We anticipate pricing over 2024 will track at or slightly above the five-year average price ranges driven in part by potentially good demand from the US and set against the expectation of steady beef production compared with 2023 numbers.”

Rabobank New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 120 years’ experience providing customized banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of about 8.6 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading agricultural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 27 offices throughout New Zealand.


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