There is an outlook that international beef prices will rise over the medium to long term. Brazil, which has contributed to supply volumes on the back of its ample cattle-raising base, has entered a phase of reduced supply, and major producers such as the United States and Australia are also tightening their output.
According to Bloomberg on the 29th, upward pressure on prices is spreading across the global beef market. Brazil, a key pillar of beef supply, is reducing slaughter volumes and holding back nulliparous heifers (young cows that have not yet calved) to rebuild herd numbers. Holding nulliparous heifers is regarded as the opening signal of a beef supply contraction phase.
Previously, over the past two years, Brazil rapidly increased beef production and exports based on its abundant herd, boosting its share in the global market. As cattle prices in Brazil stayed lower than in the United States and Australia, farms expanded slaughter volumes, and major importers such as China bought large quantities of comparatively cheap Brazilian beef, sharply raising their dependence.
However, there is an assessment that Brazil's situation has changed recently as calf prices have risen. Agricultural consulting firm Datagro predicted that Brazil's cattle slaughter next year will decrease by 5.3% from this year, marking a reversal after two consecutive years of increases. Castro Alves, head at Latin American investment bank Itaú BBA, said, "The era of oversupply is coming to an end," and noted, "Supply shortages could continue for several years."
The situation is expected to worsen as major exporters outside Brazil also enter a tightening phase. In the United States, drought has reduced pastureland, sharply cutting cattle supply, and Australia, the world's No. 2 exporter, is also expected to see overall supply decline as it expands cow retention. Rafael Galu, a researcher at A7 Capital, said, "Next year is likely to be very important on the supply side as all major beef-producing countries move to rebuild their herds."
Rabobank of the Netherlands, well-versed in agricultural finance, forecast that Brazil's beef production next year will fall by 5%–6%, but that exports will reach an all-time high of 4.4 million tons. In particular, with the United States withdrawing the additional 40% tariff it had imposed on Brazilian imports, some expect beef export volumes could actually increase.
Paulo Mustefa, executive director at the Brazilian meat processors association Abrafrigo, said, "With supply constrained and international demand still strong, the beef market is likely to be quite bullish next year."