UTRECHT, NETHERLANDS — The first reduction in the global beef supply since the COVID-19 pandemic is predicted in 2025 due to herd contraction in the world’s four largest beef producing countries, according to RaboResearch’s newest global beef quarterly report. The shift in supply could alter trade flows throughout the new year, the report noted.

Rabobank estimates that 500,000 tonnes of supply will decline compared to last year, the equivalent of 1%. Leading the production declines are Brazil and the United States, but reductions are also anticipated in China, Europe and New Zealand. Australia may be the only top-10-beef-producing country to post year-over-year gains in 2025.

While North American cattle prices have been high for nearly two years as a result of the lower cattle numbers and strong consumer demand, other regions have experienced low cattle prices. This trend has started to change as global beef declines start to firm up support for cattle prices in South America, Australia and New Zealand. 

As the top global beef markets alter their available supply, Rabobank said to expect beef trade to “dramatically” shift. According to Angus Gidley-Baird, senior animal protein analyst for RaboResearch, Australian beef producers will increasingly depend on exports to absorb stronger domestic production, while Brazil will see global markets as a better demand opportunity compared to lackluster domestic demand.

While contraction is expected to occur, beef production has the potential to swing if patterns change. US producers are waiting for more dependable precipitation to rebuild the herd. Recent reports of seasonal cooling could be the shift in weather needed to end the multi-year drought. Meanwhile, Brazilian production is being slowed by rain delays. Australia has maintained adequate precipitation for a few years, but the threat of dryness could lead to more production.

Likely, 2025 weather will keep the status quo, according to Rabobank. The latest El Niño Southern Oscillation models are predicting La Niña weather conditions to persist into the first quarter of 2025 before transitioning to a more neutral pattern by midyear.

Gidley-Baird noted this will support Australian beef production.

“Furthermore, year-over-year declines in US beef production will remain relatively small, as US cow herd rebuilding remains stalled by slower replacement heifer development,” he added.