Little has changed in the situation on the beef market in recent weeks. The tight supply results in high prices that are effortless. The sharp price increases will end up on the end consumer's plate and parties are wondering what prices consumers are still willing to pay.
The persistently tight supply of cattle for slaughter has led to significant increases in prices in the first seven weeks of the year. However, the market seems to be taking a breather this week in the Netherlands. The prices for both slaughter cows and bulls remain unchanged. In Leeuwarden, the quotations also remained the same last week, albeit at historically high levels.
Difficult logistics further limits the supply of beef
In the meat trade it is also noted that the difficult logistics are further tightening the current beef supply. Imports from South America regularly arrive with (significant) delays, which can endanger supplies. According to insiders, the higher prices are passed on fairly well to links further down the chain, although this sometimes takes several weeks. "That has to go smoothly, otherwise you won't last long at this point," it sounds.
While in the past sales agreements were regularly made for a period of several months, periods are now kept as short as possible. Due to the volatile and rising purchasing quotations, even relatively short-term price agreements of a few weeks already entail risks for buyers and/or processors. Trade therefore looks a bit tense.
Ultimately, the price increases also reach consumers. “Beef is becoming a real luxury product,” is what the trade says. It remains to be seen what prices consumers are willing to pay. There is also the feeling that the market is now slowly approaching a price peak. However, sales remain good for the time being and parties do not see a decrease in demand for products.
Major powers are increasing production
Internationally, the beef supply is growing this year. A number of large exporters are increasing animal numbers again. Australia was severely affected by drought for several years. Beef farmers were forced to reduce their livestock due to a lack of good feed supplies. Now that weather conditions have improved, livestock farmers are focusing on growth again. The United States Department of Agriculture (USDA) predicts an increase in the number of cattle kept by 0,9 million heads: from more than 23 million animals to just under 24 million heads. An increase of 3,9%. It is expected that this will allow the country to increase exports again.
Most striking is the increase in the number of cattle in Brazil. The world's largest beef producer and exporter is significantly increasing the number of cattle this year. According to the USDA, nearly 12 million cattle will be added this year. The total number of cattle kept increases from more than 252 million animals to approximately 264 million animals. An increase of 4,7%. In line with this, the Ministry of Agriculture also predicts an increase in the exported volume: from 2,32 million tons to 2,68 million tons of meat.
The global export volume of beef is reported to increase by 0,46 million to more than 12 million tons, a plus of 4%. Because demand is still good, the larger internationally available volume does not appear to have any effect on the market. Prices for cattle and beef remain at an unchanged high level.