Global beef markets brace for changing trading environment

Uncertainty and unpredictability have impacted global markets since the new US administration took office in January. The global cattle market is no exception. Since beef is one of the most important agricultural products in the United States, any changes in US trade agreements could impact the beef market both domestically and internationally.

According to RaboResearch’s latest quarterly beef report, global cattle markets are on track to grow in the first half of 2025. Based on current supply and demand conditions, RaboResearch expects trade flows to remain stable. However, if the US and its major trading partners, such as Europe and China, engage in a trade war, this could change.

Cattle prices in Europe showed exceptionally strong growth in the first quarter as domestic supply tightened and demand remained strong.

“The rise in European prices is in line with strong North American cattle prices, which continue to rise slowly,” said Angus Gidley-Baird, senior animal protein analyst at RaboResearch. “In both Europe and the United States, diseases and pests are impacting livestock supplies. In Europe and now the United Kingdom, bluetongue continues to affect livestock. Meanwhile, the presence of the New World blowfly in Mexico has forced U.S. authorities to close the border to Mexican cattle imports, and the risk of potential infestation in the United States is increasing.”

The current animal health threats are hampering production in markets where cattle supplies are already historically tight, which is likely to further push up cattle prices, RaboResearch explained. The United States and Mexico are collaborating daily to develop tactics and tools to effectively eradicate the New World blowfly.

Global beef production is expected to decline for the rest of the year, with an overall decline of 2% in 2025.

Brazil is likely to see the largest contraction, with a projected 5% drop, followed by New Zealand with a 4% contraction. Europe, the United States and China are also expected to see contractions. Australia is one of the few regions where production is expected to increase.

Trade Talks

Tariffs were imposed on many countries exporting beef to the United States on April 5. Additional retaliatory tariffs for some countries are currently suspended until early July.

Meanwhile, tariff escalation between the United States and China has been suspended until early August, although China still maintains a 20% tariff. In addition to the tariffs, China has yet to renew the registration of U.S. beef export plants.

As negotiations progress, beef trade volumes are beginning to shift around the world. RaboResearch noted that reports are emerging that indicate Chinese buyers are increasingly looking to Australia, New Zealand and South America as beef suppliers.

“Much of the media attention has been focused on the imposition of tariffs, but this may be just a prelude to the main event,” said Gidley-Baird. “In just a few months, countries have entered into 30-day trade talks. The result has been the largest number of trade deals we have seen in decades. While the tariffs may have grabbed the headlines and caused problems, the real story will be about the impact of the changing dynamics of global trade.”

The full extent of the trade war is yet to be determined, but RaboResearch is cautiously optimistic about the beef market.

“Beef is not considered a target product and most major exporters only face base tariffs,” said Gidley-Baird. “So early indications are that competitiveness will be maintained, albeit at additional costs to the system. The global supply and demand environment should support current trade flows. However, if the tariff war between the US and China escalates and Europe becomes more involved, this is likely to change.”

Tags: Beef cattle