Content supplied by Rabobank.
Following a surge in the second half of 2024, the golden run for New Zealand farmgate beef pricing has continued in the early part of 2025. And with US demand for Kiwi beef forecast to stay strong, returns are expected to remain elevated throughout the course of the year, according to a new report by food and agribusiness specialist Rabobank.
In its recently-released Q1 Global Beef Quarterly report, Rabobank says New Zealand farmgate prices in February were well up on five-year averages, off the back of stronger export demand and lower cattle inventory.
“Despite current uncertainty around tariffs, we expect the US will continue to dominate exports in quarter one 2025 and throughout 2025, and this will drive strong returns for New Zealand producers and exporters of beef,” RaboResearch senior agricultural analyst Jen Corkran said.
“US imported beef prices for 95 CL bull rose to NZD12.66/kg in late February 2025 which is more than 40% above the five-year average.
“Pricing may also be supported by lower New Zealand beef production volumes, with these likely to be down by around 5%-6% on quarter one 2024, the fallout of fewer beef calves reared two years ago.
“What is unusual for the start of this year is that pricing continues to sit above the spring peak and, as of yet, no decline has been seen.”
Ms Corkran said the expected strong US demand continues the trend seen in 2024.
“Total New Zealand beef export volumes for 2024 were down 5% on 2023 volumes but the value of exports was almost exactly the same, at NZD 4.394 billion,’ she said.
“The US trumped China to become the leading market by both volume and value in the 2024 calendar year.
“The US saw a 2% increase in export volumes to 183,000 metric tons (mt) with a 16% increase in value (to NZD 1.848 billion) for New Zealand. China, on the other hand, saw export volumes decline 27% to just under 148,000mt, with a drop of 32% in value YOY (to NZD 1.05 billion).
Global update – prices remain “separated”
While beef cattle pricing in New Zealand and other southern hemisphere beef-producing countries remains robust, it continues to lag far behind pricing in North America and Europe. “US and Canadian cattle prices have started 2025 where they left off in 2024 and, similar to the trend early in 2024, they are again on the rise,” Ms Corkran said.
“Ongoing low inventory levels, coupled with strong consumer demand and the hint of rebuilding, continue to push cattle prices higher to levels that are now about double that of those for major southern hemisphere producers.”
“Beef prices in the EU also remain very healthy, but significantly lower than in North America.”
The report says global beef production levels are expected to contract in 2025 after peaking in late 2024.
“RaboResearch projects that quarter one 2025 production will be down 2% on the same period in 2024, with quarter two volumes down 3%,” Ms Corkran said.
“Overall, we expect global beef production in 2025 to be down 2% to levels that are 3% higher than the average volume of production in the five-year period between 2019 and 2023.
In addition to lower New Zealand production, the report says contractions are also expected in South America.
“Production in the four largest South American beef producing and exporting countries – Brazil, Argentina, Uruguay, and Paraguay – is expected to contract in 2025,’ Ms Corkran said.
“We expect Brazil, which accounts for 63% of South America's supply and is the world’s largest beef exporter, will reduce its production by 500,000 mt this year. The high level of female slaughter, encouraged by strong prices through 2022 and 2023, is the main reason for declining production.”
Ms Corkran said this lower forecast for Brazilian beef production follows record high beef export volumes in 2024.
“Brazilian beef exports reached 2.9 million mt in 2024, an increase of 26% YOY. China remained the main destination, representing 46% of the total shipped volume, followed by the US (8%) and the UAE (5%),” she said.
“Despite the anticipated production decline, Brazilian export volumes may be similar to 2024 due to an ongoing trend of declining consumer purchasing power locally and thus reduced domestic consumption of beef. This has led to export volume growth being the primary strategy for processors as the expense of the local market.”
The report says the new US administration is the major source of uncertainty for global beef markets over the months ahead.
“In the first few months under the new US administration, we have already seen significant uncertainty. Trump’s promised tariffs on Mexico and Canada were put into effect last week and then partially rolled back, while further warnings were also made about tariffs on imported food products,” she said.
“Depending on what decisions are made, there is potential for disruptions to trade flows into the US, and, given its position in the global market, these are likely to spill over into global trade impacts.”
RaboResearch Disclaimer: Please also refer to our disclaimer here for information about the scope and limitations of the RaboResearch material provided in this media release.
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