The United States Department of Agriculture (USDA) expects global beef and veal production to reach 59.1 million metric tons (mmt) in 2024, nearly unchanged from 2023. Increases in Brazil, China, and India are offset by declines in the United States (US), Argentina, Canada, and the European Union (EU). Brazil’s beef and veal production is estimated at a record 10.8 mmt in 2024, a 3% year-on-year (YoY) rise due to economic recovery, bolstering domestic demand. China's production is expected to grow in 2024, driven by a marginal uptick in cow inventory. India's growth in beef and veal output is anticipated to be catapulted by increasing slaughter to meet the growing global and domestic demand.
The USDA expects Argentina's beef and veal production to decrease in 2024 as slaughter returns to levels closer to recent history after drought-induced liquidation in 2023. Canada faces continued herd contraction, with cattle inventories dropping to a 35-year low. This situation is forecasted to result in low Canadian beef production. EU beef and veal production grapples with high input prices and regulatory complexities, impacting profit margins and discouraging investment. US beef production is projected to decrease by 6% YoY due to tight cattle inventories, leading to increased imports and reduced exports.
The weighted and traced steer prices stood at USD 3.78 per kilogram (kg) in Argentina in W46, a USD 0.06 increase compared to W45. This marked the third consecutive week of growth, indicating a recovery in dollar value amidst stable official and financial exchange rates. This places the Argentine price 19% above the Mercosur regional average, with a consistent 3% week-on-week (WoW) growth, maintaining a 7% lead over competitors. Meanwhile, in Brazil, fat steer was valued at USD 3.17/kg, a marginal USD 0.03 decline from W45, partially offset by the real's appreciation. Given the robust activity, Brazil’s beef exports are expected to reach approximately 200 thousand metric tons (mt) in Nov-23, nearing record levels.
The export-type steer was priced at USD 3.06/kg in Uruguay in W46, a USD 0.03 WoW decrease. Uruguay’s beef exports continued slowly, targeting 28 thousand mt, a 35% YoY reduction. This is despite a notable increase in workload, with 58 thousand heads processed in W45, a 10% WoW rise, and a 24% surge from the ten-week average. In Paraguay, the eligible EU steer maintained a price of USD 3.27/kg, unchanged for the past five weeks, with Chile being the most active market and kosher operations to Israel yet to commence.
The USDA reports that US cattle placements in feedlots reached 2.16 million heads during Oct-23, a 4% increase compared to Oct-22. This improvement could be attributed to elevated feeder cattle imports from Mexico. This upward trend is poised to boost supplies and could potentially exert downward pressure on prices. US marketings fell by 3% YoY to 1.58 million heads, slightly higher than anticipated. The total cattle on feed increased by 2% YoY to 11.93 million heads as of November 1, aligning with pre-report expectations. While these statistics suggest a bearish outlook for cattle prices in early 2024, the actual impact will hinge on both domestic and global beef demand.
According to the Steiner Consulting Group, US beef herding is projected to total 86.9 million heads as of January 1, 2024, a 2.7% YoY drop, the fifth consecutive decline, and the lowest in 70 years. This reduction is expected across all categories, with breeding cows of meat breeds contracting by 2.5% YoY to 28.2 million heads and a potential recovery anticipated to start from 2025. The projection also indicates a contraction in the slaughter of beef-breed cows to 17.3% of the herd in 2023 and 15.4% in 2024. Slaughtered cows are expected to reduce by 5.5% YoY in 2023, and an additional 12.5% drop is foreseen for 2024. Notably, although the slaughter of cows and bulls aligns with the average of the last five years, it occurs with a smaller overall stock.
The Steiner Consulting Group expects per capita beef consumption in the US to decline by 2.3% YoY in 2023, with an additional 5.1% YoY decrease in 2024, reaching 35.3 kg per person annually. A further decline is anticipated in 2025 to 34.4 kg per person per year. This negative outlook is linked to reduced beef availability and increased prices, leading to a loss of competitiveness against alternative animal proteins. Despite a decline in the cattle stock, substantial gains in productivity have been achieved over the years. This scenario opens up possibilities for technological improvement, fostering growth in the domestic market and facilitating enhanced exports.