Consumers are shifting their meat spending patterns due to economic pressures, but beef consumption around the globe is expected to remain steady in 2024, according to bank analysts.

While there was some movement to lower-priced beef options in 2023, overall demand held up relatively well, according to Rabobank’s latest global beef report.

“Questions about economic performance, income levels, costs and the direction of monetary policy remain unanswered, but we expect overall beef demand to hold in 2024 and, therefore, consumption levels to remain steady,” the bank’s analysts said.

Rabobank does expect unemployment rates to rise in many countries in 2024, suggesting that upward pressure on wages should ease. If inflation remains high, real wages should decline, putting more pressure on household income.

“The strength of the economic outlook in different beef-consuming markets creates an interesting overlay to the global beef production situation and the balance of trade,” the analysts said.

Beef production

Increased beef production in Australia and Brazil is offsetting declines in the U.S. and the European Union.

“For those in the supply chain, this poses important questions around margins and trade,” they said.

In a market where beef production is limited, such as the U.S., consumers might be willing to tolerate higher prices at the expense of some consumption. In a market with growing beef supply, such as Australia, lower prices might be needed to encourage consumption.

“These supply-and-demand dynamics may swing trade flows toward the U.S. China’s import demand should remain sluggish in 2024 — at least in the first half — and with demand strength and lower domestic supply in the U.S., beef trade is already being diverted to the U.S.,” the analysts said.

If China’s recovery is better than expected, global beef markets could become quite tight, fueling price increases.

Price setter

“With U.S. production declining and its economic outlook being reasonable, the U.S. is likely to lead the beef price-setting market. This is likely to draw increased volumes from Australia, New Zealand and Brazil, along with trade from Canada and Mexico,” the analysts said.

But value will become the dominant theme across most markets in order to retain consumers facing tighter economic conditions.

As for U.S. production, drought is expected to steadily ease, benefitting cow-calf producers in the first half of the year. In addition, Dec. 1 hay stocks, while still historically low, were up 7% year over year and hay prices are lower.

Herd stabilization

But extreme weather from late December to early January across major cattle-feeding regions is expected to decrease cattle performance, reduce carcass weights and diminish quality through the first half of the year.

In addition, the Jan. 1 beef cow inventory was the smallest since 1961, and the supply of beef replacement heifers was the smallest since 1950.

“However, a path towards herd stabilization exists in 2024,” the analysts said.

Weekly beef cow slaughter was 12% below a year earlier six weeks into 2024, and recent winter weather should benefit spring pastures and reduce culling.