UTRECHT, NETHERLANDS — Rabobank’s latest beef report for the third quarter, noted that the global beef market remains strong, with most beef retail prices trending upward in the previous quarter. Angus Gidley-Baird, senior analyst for Animal Protein at Rabobank, questioned how long the trend will continue.
With slowing economies and rising inflation, evidence shows that consumers are losing confidence, Rabobank said.
“We see movement within supply channels and price points that tend to favor cheaper options, such as ground beef and quick-service restaurants, over more expensive cuts and consumption channels,” Gidley-Baird noted.
While this past year global beef markets have seen record high prices due to tight supplies and strong demand, consumers’ spending habits are shifting.
“We expect consumption volumes of trimmings to remain strong and potentially to increase in 2H 2022, as consumers are expected to trade down to lower-value beef cuts and cheaper proteins,” Gidley-Baird said.
Major importers for trimmings are the United States, China, Japan and South Korea.
China increased imported volumes by 33%. It now receives 52% of Brazil’s total exports, with the United States and Egypt following behind as the second and third largest destinations.
Since COVID-19 restrictions, Japan’s foodservice sales have taken a hit. The government eased some measures in June and is once again accepting foreign tourists, which Rabobank predicts could drive the recovery of foodservice channels.
Rabobank reported favorable cattle markets. It expects to see growth for major producing and exporting countries in Q3 and Q4 2022, as higher US and Brazil production dominate the market.
While Mexico is expected to have a 2% increase in cattle slaughter this year, the US drought is affecting exports. Feeder cattle and calf exports to the United States were down 43% in the first half compared to the previous year.
Europe will see a slight decline in production in 2022, as France and Germany’s decline outweighs the positive production of the United Kingdom, Italy, Spain and Ireland.