Beef – Procurement Best Practices & Sourcing Strategies

DESCRIPTION

Beef Market Global Size:

The global supply for the beef market was evaluated at 70.1 MMT in 2023, as per ELINT Market Research’s procurement market study due to augmented demand for good quality and sustainable beef products among people. As today’s generation is concerned about health and the environment, so they demand beef manufacturing companies employ eco-friendly methods to produce beef goods. These strategies generally include sourcing beef that is locally produced and naturally raised. Thus, the global consumption of the beef sector reached 57.4 MMT, and the ending stock value was calculated at 0.537 MMT in 2022–2023.

Further, Mexico emerged as the major supply economy in the beef industry which experienced a 7.3 percent increase in its supply dynamics from 2018 to 2023 due to some key factors like enhanced manufacturing systems, infrastructure development, and the existence of notable industry players. Moreover, few countries experienced diverse production and distribution figures for beef goods due to varied weather conditions in 2022-23. In this context, the U.S. underwent unfavorable weather circumstances that impacted cattle herds and lowered beef production. On the flip side Brazil, Australia, and New Zealand nations encountered favorable weather situations and met required beef manufacturing and supply dynamics.

Market Definition:

One of the most popular and widely consumed meat varieties is beef, which is primarily derived from cows, bulls, steers, and baby cows. The worldwide population considers beef as the prominent source of protein and adds it to their different diet plans in varied forms like grilled, toasted, boiled, and deep fried. Moreover, presently, beef-producing companies are adopting technical refinements in meat processing and packaging activities that help increase products’ shelf life and gain consumers’ trust concerning safety.

Beef Market Drivers:

1. Raise in Disposable Incomes –

Rising populations and disposable incomes, particularly in developing countries are some of the key drivers for growth in the global beef market.

2. Increasing Consumer Demands –

The popularity of high-quality and healthy beef products is advancing day by day among consumers which is a prominent reason for constant development in the international beef market.

Beef Market Challenges:

1. Inflationary trends in U.S. –

Growing inflation in key beef-producing nations i.e. U.S. is driving elevated expenses for labor, feasts, and operations that automatically cause consumers to pay higher prices. Apart from that, shipping and conveyance prices of beef products also developing in a few key countries which poses significant challenges in the global market.

2. Ukraine-Russia Crisis –

Due to the Ukraine-Russia war crisis the global beef procurement intelligence market experienced a reduced degree of feed supplies. Thus, beef manufacturing companies faced challenges in maintaining production and supply dynamics.

Beef Market Opportunities:

1. Improved Supply Chains –

In the last few years, the production systems and supply channels of beef products have been enhanced which caused optimistic opportunities for the global beef market participants.

2. Reduced Trade Barriers –

Beef market payers encounter reduced levels of barriers while executing beef trading activities due to the existence of noteworthy trade policies that help streamline transaction flows, distributions, negotiate terms, etc.

Beef Market Segmentation:

1. Types of Beef Products –

A variety of beef products are available in the market, such as ground cattle, ribeye, select cuts, quality slits, tenderloin filets, and cooked meat items, which is a foremost segmentation factor for the beef industry.

2. Various Distribution Channels –

A few major distribution channels to deliver beef goods to consumers include retail shops, supermarkets, meat markets, eateries, local stores, online outlets, and more.

Regional Outlook of the Beef Market:

ELINT’s procurement study reveals the contribution of different countries in beef production, consumption, export, and import movements which also possess significant percent shares. For instance, major beef manufacturing countries include the US at 21.7%, Brazil at 16.8%, the EU at 11.5%, China at 12.9%, and India at 7.4%.

On the flip side nations which massively consume beef goods include the US at 22.5%, China at 18%, Brazil at 12.7%, India at 5.1%, and Argentina at 4%. Further, countries that are fulfilling worldwide beef demands by exporting moves include Brazil at 22.9%, the U.S. at 13.3%, Australia at 11.3%, India at 12.4%, and Argentina at 5.9%. Moreover, notable import provinces of the beef industry comprise China at 31.5%, the US at 16.2%, Japan at 8.2%, South Korea at 6.1%, and Chile at 4.6%.

Moreover, when it comes to pricing dynamics of the beef sector, two fundamental regions appeared in the list. The US accounted for $289/cwt beef and India accounted for ₹200/kg beef products.

Engagement Models and Benchmark Price Indices in the Beef Market:

Global beef market procurement intelligence companies employ major engagement models and benchmark price indices to streamline trading and cost structures. In this context, over the hooks method helps sell beef goods depending on their estimated weight and quality and paddock sales allow the execution of direct and immediate translation among stakeholders. Further, forward contracts assist in deciding beef prices depending on predetermined terms among stakeholders. Moreover, USDA markets weekly price, CBOT, and MLA indices in the U.S. to help market players make informed decisions and reduce risks.

Cost Drivers in the Beef Market:

Some of the major components that influence cost structure in the global beef market include feed which owns 72%, operational costs that possess 18%, and other additional expenses that hold a 10% stake of the total costs.

Trade Tariffs in the Beef Market:

Trade tariffs help beef goods exporting economies to facilitate trade dynamics in the global market. Thus, major countries that appeared allies conducting beef-producing and consuming moves include the US which owns 0% tariff rates for beef imports from Canada. Further, Australia and New Zealand have a 10% import tariff from Argentina. Moreover, Australia shows a tariff rate of 18.6%-50% from China, Japan, and the US nations. Lastly, India maintained a 30% import tariff rate from major provinces like the US, UAE, and Saudi Arabia.

Key Suppliers in the Beef Market:

Two prominent and renowned suppliers of the global beef market include JBS S.A and Tyson Foods.