UTRECHT, NETHERLANDS — While beef production is projected to contract, cattle prices are expected to maintain their current levels, according to Rabobank’s global beef quarterly report for the second quarter.

Moving into the second half of 2024, Rabobank forecasts a downturn in beef production volumes from major producers. Notably, Europe and the United States are set to experience contractions that will overshadow production increases anticipated from Australia and Brazil. China is also expected improve production in the second quarter, followed by a reduction later in the year.

Amid contraction in local production, North American cattle market prices are hovering near record highs, according to the report. The April USDA all-fresh beef retail price reached a new all-time high of $7.95 per lb, according to the report. Meanwhile, other regions are experiencing less extreme pricing. As the global cattle market moves at two distinct paces, Europe finds itself in the middle despite a recent uptick in production.

The regional disparities are beginning to influence international trade flows, with the United States ramping up its import volumes and major Asian markets maintaining steady import levels.

The global beef industry remains on alert for animal diseases that may pose a threat to the supply chain.

“We continue to monitor the recent transmission of H5N1 avian influenza to dairy cattle, although no cases have been reported in beef herds, and beef food safety remains uncompromised,” said Angus Gidley-Baird, senior animal protein analyst for Rabobank.

The presence of avian influenza in Brazil has the potential to disrupt the poultry industry if an outbreak were to occur, considering Brazil is the largest poultry exporter, said Rabobank. Such an event would indirectly impact beef prices and exports.

Recently, Brazil declared itself free from foot-and-mouth disease without vaccination. Official recognition from the World Organization for Animal Health could significantly enhance Brazil’s trade prospects.

Rabobank said growing demand for climate disclosures is expected to creep into beef supply chains, presenting both opportunities and risks.

New regulations are emerging that require companies, including those in the beef industry, to disclose supply chain emissions. The regulations do not mandate emissions reduction targets, rather they seek to promote transparency and comparable sustainability information so investors can better assess climate risks.

The beef industry faces a particular challenge with scope 3 emissions, which are substantial, yet difficult to measure. For most food retailers, scope 3 emissions represent over 90% of their total greenhouse gas inventory. Under the reporting regulations, large beef companies will be required to navigate the complexities of collecting and reporting accurate emissions data.

Beef supply chains should focus on accurate data collection, improved data transfers and reporting, and new tools for demonstrating progress, the report said.

“At the farm level, carbon calculators and measurement tools will become important to facilitate a bottom-up approach to measurement,” Gidley-Baird said.