As of January 13, 2025, cattle markets in the United States have reached unprecedented levels, with February live cattle futures closing at $198.775, marking a record high. Feeder cattle futures also saw significant gains, reaching $272.35. Cash cattle prices increased by $4.00 to $5.00, reflecting strong demand in the market. The USDA reported that 19,071 steers were sold at an average price of $202.80, while Choice grade boxed beef rose to $332.84 and Select grade increased to $314.14 [58d1fa24].
The total number of cattle-on-feed was reported at 12.0 million as of December 1, 2024, with placements down 4% from the previous year. This decline in placements suggests a tightening supply, which could further support price increases in the coming months [58d1fa24].
The recent strong U.S. employment report, which added 256,000 jobs, has contributed to a positive economic outlook, potentially boosting consumer spending on beef products [58d1fa24]. However, market volatility is expected, and caution is advised against short-selling as the market adjusts to these record highs.
In addition to domestic factors, external issues such as the discovery of New World Screwworm in Mexico have led to a cattle import ban, further complicating the supply dynamics and potentially driving prices higher [58d1fa24].
Meanwhile, Uruguay is actively working to lessen its dependence on China for beef exports, as North America, particularly the United States, has emerged as the top destination for Uruguayan beef in the first half of 2024. Recent data indicated that Uruguayan beef exports reached approximately $1.223 billion from January to August 10, 2024, marking a slight increase of 0.1% compared to the previous year. The volume of exports rose by 7.1% to 299.95 thousand tons, although the average price per ton fell by 11% to $4,079 [3d697bc7].
In this shifting landscape, the US, Canada, and Mexico collectively accounted for 32% of Uruguay's beef export revenue, totaling $390.8 million, while China followed closely with a 30% share, amounting to $371.5 million. The European Union ranked third, contributing 16% to the export figures [3d697bc7].
The USDA has forecasted an improved response from the Chinese market in the second half of 2024, predicting a modest increase in Chinese demand of 1.3%. This forecast represents the lowest growth rate in a decade, indicating a cautious outlook for the Chinese market [3d697bc7].
As Uruguay navigates these changes, the government and industry stakeholders are focusing on diversifying their export markets to ensure stability and growth in the beef sector amidst ongoing global economic fluctuations and shifting consumer preferences [3d697bc7].
In parallel, China's beef farmers are grappling with an 11-year low in prices, with average wholesale beef prices dropping to 59.8 yuan (US$8.19) per kilogram, a 16.4% decrease year-on-year as of December 2024. Retail prices for boneless beef fell to 65.5 yuan (US$8.98) per kilogram in November, down 18.6% year-on-year. Farmers attribute this decline to a surge in imports, which have increased eightfold over the past decade, now accounting for over one-third of domestic production [6fb4f5aa].
In response to these challenges, industry associations in China have called for an official investigation into beef imports, which was initiated on December 30, 2024. This move aims to protect domestic agriculture and address the concerns of local farmers facing declining prices [6fb4f5aa].
Meanwhile, the global organic beef market is projected to grow at a compound annual growth rate (CAGR) of 6.8% from 2023 to 2033, targeting a market size of USD 22.89 billion by 2033. North America holds the largest market share at 35%, with the United States alone accounting for 20% of the global organic beef market. This growth is driven by rising consumer demand influenced by health and sustainability concerns [af33cdef].
Key players in the organic beef industry include Organic Prairie, Niman Ranch, US Wellness Meats, and Verde Farms, highlighting the intense competition and innovation within the sector. As consumer preferences shift towards organic and sustainable options, Uruguay's beef producers may find new opportunities in this expanding market [af33cdef].