Knowledge

To provide the latest market news and hold online & offline events to assist you being well-informed and making decisions.

26

2023

-

02

Rabobank: Beef Quarterly Q1 2023: China’s Reopening Provides Opportunities for Beef

Source:

Rabobank

Retail and farmgate beef prices cracked records in many regions in 2022, driven by elevated consumer demand and tight beef supplies. Brazil also achieved record export volumes and returns in 2022, thanks to growing Chinese demand.

 

Retail and farmgate beef prices cracked records in many regions in 2022, driven by elevated consumer demand and tight beef supplies. Brazil also achieved record export volumes and returns in 2022, thanks to growing Chinese demand.

 

The softening in consumer sentiment and subsequent weaker beef pricing in late 2022 has flowed through into early 2023. While beef supply settings are favorable for beef prices, consumer confidence will continue to be tested and have a bearing on beef returns. China will remain a focal point, as the world watches to see how quickly the giant emerges from Covid lockdowns amid a slowing economic environment. It is anticipated that Chinese demand for beef will pick up in 2H 2023, boosting global beef prices. 

 

The US will be the other focal point. After setting records in both volume and value terms for beef exports in 2022, numbers are starting to show the contraction in production. Beef cow inventory has dropped to the lowest point since 1962 and feedyard inventories show a decline. The expected drop in US beef production will cause a redistribution of global beef supplies and an overall tightening in the market.

 

Total beef production is forecast to be steady in Q1, with a 5% lift in Australian and 2% increase in Brazilian production, almost enough to offset declines in the US, EU-27, and New Zealand. The supply picture through 2023 is forecast to remain tight as US production dips. 

 

Cattle prices across most regions continued their downward trend. The notable exception being the US, where more limited supplies are providing price support.