The United States has an “insatiable appetite” for beef and is currently Australia’s biggest export market ahead of Japan and China.
In the first half of this year, Australia exported 155,430 tonnes of beef to the US, up 75 percent from the same period last year and the highest since 2015.
And it’s not just ground beef to make hamburgers.
According to Meat and Livestock Australia (MLA), the US has also become our largest market for loin cuts, such as Scotch loin and sirloin.
So what’s going on?
After three years of drought, the U.S. cattle herd is at its lowest point since the 1950s.
Its domestic supply of beef is dwindling, but demand remains strong in a country famous for its love of hamburgers.
Global Agritrends analyst Simon Quilty said the US had been forced to import large quantities of meat.
“They have an insatiable appetite and are gobbling up as much lean meat as possible globally to mix with their meat. [to make hamburgers]”, he said.
“Beef, which is a byproduct of cow processing, is increasing in value and we are seeing record prices every day in America in America.”
He said the US price for 90 CL fresh beef was a record US$3.75 per pound ($12.53 per kilogram), however the US was not paying record money for Australian beef.
“They are not yet paying record money for Aussie beef,” Mr Quilty told ABC Landline.
“At the moment they are paying about $2.50 per kilo less for Australian product compared to fresh domestic 90CL in the US.
“What’s happening is the United States is importing beef from other countries like Brazil, which is undermining the value of Australian beef.”
Race from Brazil
Quilty said Brazil had been sending record amounts of beef to China in recent years, but with China’s economy slowing and U.S. demand heating up, the beef trade had changed — despite the tariffs.
“So Brazil reached its U.S. beef quota within the first three months of this year, but they’re still sending beef outside of that quota and paying a 26.4 percent tariff because it’s still a better option than sending of beef in China or other parts of the world,” he said.
“That’s how good the U.S. market is, compared to the rest of the world, for Brazilian beef right now.”
He said June shipments of Brazilian beef to the US had risen to 17,500 tonnes and he expected those volumes to continue for at least the next four months.
What else?
Meat and Livestock Australia’s Tim Jackson said herd rebuilding in the United States had not “technically started” but it was clear that cattle culling was “definitely slowing down” and that weather conditions were improving.
He said cattle prices in Australia had started to rise this month and the national index of processing cows was now at its highest level since February 2023.
Mr Jackson said the rising price was due to a number of factors, “but in particular we are seeing very strong export demand from the United States for all types of meat”.
Jackson said the main question for the rest of the year was China’s economic performance.
“The world’s largest beef importer and second-largest economy has seen a slowdown in key economic indicators,” he said.
“If export volumes to China begin to decline materially, this would further accelerate the diversification of South American exports and is likely to put significant pressure on cattle prices.”
Mr Quilty said the US becoming Australia’s biggest loin market was interesting and a sign its record demand for lean beef was “lifting all boats”.
He is predicting that global beef prices will rise in the coming months, similar to what they did in 2014 and 2004.
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