UTRECHT, NETHERLANDS — Global beef production reached its peak in 2024, and now, moving into 2025, RaboResearch’s global beef quarterly report predicts contraction. In the first quarter of 2025, beef production is expected to drop 2% below results from the same period last year, with second quarter volumes down 3%. Brazil and New Zealand will likely lead the largest contractions in the coming months.

While herd size diminishes, global beef demand is still on the rise, leading South American producers to prioritize exports over domestic markets. South America’s four largest beef-producing and exporting countries — Brazil, Argentina, Uruguay and Paraguay — are anticipated to see contraction this year.

“We expect Brazil, which accounts for 63% of South America’s supply, to reduce its production by 500,000 metric tons this year,” said Angus Gidley-Baird, senior analyst of animal protein for RaboResearch.

The decline in South America’s production is mainly due to the high amount of female slaughter driven by strong prices through 2022 and 2023. In the coming year, Brazil will likely retain females, reducing its beef supply.

Declining consumer purchasing power and reduced domestic beef consumption have led processors to focus on export volume growth. This strategy has resulted in a decline in local consumption across all four countries, the RaboResearch report said. Beef consumption holds a larger share of South American diets in comparison to other regions around the world, yet domestic economic pressures, increasing availability of other proteins and the increased demand from export markets have led to beef consumption per capita decline.

Weaker economic conditions paired with competition from export markets have raised the cost of beef. Between 2020 and 2024, the volume of beef that could be purchased on the basic wage dropped across all countries, noted RaboResearch. In Brazil, the average consumer now gets 20% less beef on the basic wage than they did four years ago. 

“We believe this trend will continue in the coming years, making more beef available for the export market,” Gidley-Baird said. “Poultry is already the largest consumed protein in Brazil, Paraguay and Argentina, but other proteins such as pork and seafood have smaller shares of the diet than in other markets and therefore in our view have the capacity to increase.”

However, the cultural appeal of beef remains positive. As such, RaboResearch does not expect that per capita consumption levels of beef will drop much more.

Over the past decade, South American exports have significantly outpaced production increases, largely due to China's rising demand for the region’s animal proteins since 2019. Last year, South America supplied 76% of China’s total beef imports. Of that total, Brazil, Argentina and Uruguay contributed 47%, 21% and 8%, respectively.

Demand for beef is also strong in North America, yet inventory is low, leading to increasing cattle prices. Southern Hemisphere producers are operating at nearly half these prices, according to the RaboResearch report. Brazilian cattle prices surged at the end of 2024 but are expected to drop in the second quarter as supply increases. With favorable seasonal conditions in the Southern Hemisphere, cattle prices likely won’t rise much into the second quarter, but the possibility of rebuilding activities in North America may further inflate cattle prices and widen the gap.

Additionally, the new US administration's tariffs imposed on Mexico, Canada and China have introduced trade uncertainty, which could impact global markets.

Australia is coming off a year of record-high production with 2.57 million tonnes, 1% higher than the previous record set in 2014. Despite record production volumes, Australian cattle prices remain steady.

China’s local beef production increased 3.5% year-over-year in 2024 due to the liquidation of cattle and dairy cows with producers under financial pressures. However, cow slaughter is expected to slow in the first half of 2025.

China’s beef imports reached a record high of 2.87 million tonnes in 2025, up 5% from the previous year. Brazil will likely further increase its market share in 2025 due to its competitive prices.

Creating uncertainty for global trade, the Chinese government began an investigation into beef imports in late 2024, which will take eight months. The government suspected fast-growing imports were contributing to the unprofitability of local producers.