Analysts from Credit Agricole expect that in the coming quarters there will be a gradual recovery of the cattle population in the EU, supported by a very high historical profitability of its production, which will contribute to a decline in purchase prices.
In recent months, cattle purchase prices have been relatively stable, which is supported by the still limited supply of livestock, which compensates for weaker demand, as analysts from Credit Agricole emphasize in the latest agromap.
Price declines will return to the beef market
Analysts maintain their assessment that in the coming quarters there will be a gradual recovery of the cattle population in the EU, supported by the very high profitability of its production in comparison to the historical background.
“This will contribute to a decline in purchase prices. At the end of 2024, reductions in purchase prices will be limited by the expected stronger demand for beef supported by economic recovery in the euro zone. The main risk factor for our scenario is the pace of reconstruction of the cattle population in the EU,” the authors of the report note.
Increase in Polish beef exports despite falling prices
According to the data presented in agromap, the value of Polish beef exports (livestock, meat and products) increased by 4.1% in the period from January to December 2023. y/y compared to an increase of 31.4%. in the same period of 2022
Analysts emphasize that this was the result of an increase in sales volume and lower prices obtained by exporters.
Further improvement of production profitability on an annual basis
The authors of the report point to further improvement in production profitability on an annual basis.
“The cattle purchase price in January was PLN 10.09/kg (-7.4% y/y), and the price of cattle feed was PLN 1.92/kg (-15.5% y/y). As a result, the livestock/feed price ratio was 5.26 compared to 4.80 a year ago, signaling further improvement in the profitability of production on an annual basis,” we read in the agromap.
Forecast of cattle purchase prices at the end of 2024 and 2025.
Compared to the previous winter forecast, the cattle purchase price in Poland estimated at the end of 2024 increased by PLN 0.10/kg.
“Taking into account the situation on the EU and domestic beef markets, we expect that the purchase price of cattle in Poland at the end of 2024 will be approximately PLN 9.20/kg and PLN 9.50/kg at the end of 2025.” – say economists from Crédit Agricole.
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