Global cattle markets have all been trending higher in the first half of 2025.

However, since President Trump took office in January 2025, uncertainty and unpredictability have reverberated through the global beef market.

With beef one of the largest agricultural commodities traded by the United States, any change to US trading arrangements has the potential to affect the beef market at a global level, the  RaboResearch division says in its Q2 2025 Global Beef Quarterly report.

With the global supply and demand situation and the trading arrangements as of the beginning of June, RaboResearch expects trade flows to be maintained.

However, the report says, this is likely to change if major trading blocs, such as Europe and China, become involved in a trade war with the United States.

Contracting supplies

Global cattle markets have been trending higher in the first six months of the year, with European prices experiencing an especially strong rise in Q1, as domestic supplies contracted while demand remained strong.

“The rise in European prices now puts them in line with the strong North American cattle prices, which continue to rise slowly,” report lead author, RaboResearch senior animal proteins analyst Angus Gidley-Baird said.

“In both Europe and the US, disease and pests are affecting cattle supplies,” he said.

“In Europe, and now in the UK, Bluetongue virus continues to affect the herd. Meanwhile, New World screwworm in Mexico has caused US authorities to close the border to Mexican cattle imports, and the risk of potential infestation in the US is increasing.”

Mr Gidley-Baird said these health threats are challenging production in markets where beef supplies are already projected to be lower, likely further supporting already elevated cattle prices.

Production declines

“Global beef production is expected to contract through the remainder of the year, with an overall contraction of two per cent projected for the year,” Mr Gidley-Baird said.

“The largest contractions are expected to happen in Brazil (down five per cent) and New Zealand (down four per cent), with contractions also expected in Europe, the US, and China. “Australia is one of the few regions expected to see a production increase.”

Global trade

On April 5, tariffs were introduced for many countries exporting beef into the US.

“Additional, so-called reciprocal tariffs for identified countries are on hold until early July, and the US-China tariff escalation has also been put on hold until early August,” Mr Gidley-Baird said.

“While negotiations are ongoing, we are starting to see some redistribution of beef trade volumes around the world. Reports are emerging that Chinese buyers are looking more toward Australian, New Zealand and South American suppliers as US beef becomes unavailable or more expensive.”

Although the full extent of the trade war remains uncertain, RaboResearch remains cautiously optimistic about beef demand and trade flows.

“Beef hasn’t been singled out as a targeted commodity, and most major exporters are only facing baseline tariffs,” Mr Gidley-Baird said.

“So early indications suggest that competitive positions will be maintained, albeit with added costs to the system. The global supply and demand situation should maintain current trade flows.

But if the US/China tariff war escalates and Europe becomes more involved, this is likely to change.”

“Much of the media attention has been on the imposition of tariffs, but this may only be the opener to the main event,” Mr Gidley-Baird warned.

“In just a few months, countries have entered trade talks with 30-day time frames.

The result has been more trade agreements than we’ve seen in decades,” he said.

“While tariffs may have grabbed headlines and caused headaches, the real story will be the implications of shifting global trade dynamics.”

Australian outlook

Mr Gidley-Baird said Australian seasonal conditions will have a varying impact in different regions, but the bank expects overall beef production to remain high and cattle prices steady.

Saleyard cattle prices have been relatively steady since the start of the year, with most trading within five per cent of the average for the year to date, the quarterly report said.

The National Young Cattle Indicator has been range bound between AUD 3.41c/kg and AUD 3.78c/kg for the first four months of the year, continuing one of the most stable periods in the past 10 years. “

Widespread rain through Queensland, the largest cattle-producing state, in late March and early April provided some respite for producers that were facing drier conditions,” Mr Gidley-Baird said. “This rain has allowed most to now hold cattle and possibly increase numbers slightly, providing support for cattle prices in April and into May. At the same time, areas of southern Australia have been selling increasing numbers given ongoing dry conditions.”

He said conditions in southern Australia are poor, with many producers hand feeding or sending stock away on agistment. “As we move into winter, there has been an increase in cattle sale numbers in southern areas, as producers sell off stock before the cold weather sets in,” Mr Gidley-Baird said.

Source: RaboBank