UTRECHT, NETHERLANDS — Cattle prices in North America continue to skyrocket to record highs even though global beef supplies are expected to remain steady for the next year, according to Rabobank’s Global Beef Quarterly report for the second quarter of 2023.

“While global supplies remain balanced, cattle prices in the US and Canada push into new record territories,” said Angus Gidley-Baird, senior analyst of animal protein at Rabobank. “This is driven by declining production volumes and firm demand. It stands in contrast to other beef producing and exporting countries, which have declining or steady cattle prices. The spread between US cattle prices and those in other countries is the largest in the history of Rabobank’s index.”

Production in the United States has declined around 2%. Despite shrinking production, wholesale beef demand remains the second largest of the last 30 years, Rabobank noted.

Overall production in Europe is also on the decline, down approximately 2% year over year. Rabobank noted that, since milk prices are on the decline, the supply for cows for slaughter may increase.

Increases in Brazil and Australia have helped offset any waning supply, up 2% and 7% respectively.  Working on herd rebuilding in Australia has led to increased weekly slaughter numbers, with slaughter up 22% from this same period last year.

After China removed its COVID-19 lockdowns in late 2022, Rabobank expected the country to be a great growth opportunity. However, beef imports slowed in the second quarter and will potentially decrease further in the third quarter, slowing market recovery.

“We expect beef consumption by low to middle-income groups to slow, or even decline in volume, as consumers choose to trade down,” the report said. “Middle to high-income groups are expected to continue consuming more high-quality beef, allowing the premium market to grow further. As a result, we expect that volume growth will slow down in 2023, but value growth will continue.”

The next key player to keep an eye on is Argentina, according to the report. With the Argentine elections scheduled for October, Rabobank predicts market changes on the way. The current top three candidates represent opposition parties.

“These parties support a freer market and the removal of protectionist measures such as export restrictions,” Gidley-Baird said. “While existing export restrictions have not reduced export volumes, removing these measures may actually lead to further increases in exports.”