US demand for Australian beef rises 75 percent as drought pushes US cattle herd to lowest level since 1950s

The United States has an “insatiable appetite” for beef and is currently Australia’s largest export market after 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 level since 2015.

And it’s not just about grinding beef for burgers.

According to Meat and Livestock Australia (MLA), the US has also become our largest market for sirloin cuts such as Scotch fillets and tenderloin.

So what happens?

After three years of drought, the U.S. cattle herd is at its lowest point since the 1950s.

Domestic beef supplies have fallen, but demand remains high in a country known for its love of burgers.

According to Simon Quilty, analyst at Global Agritrends, the US is forced to import large quantities of beef.

“Grinding meat, a byproduct of cow processing, is becoming increasingly valuable and we are seeing record prices in America every day.”

He said the US price for 3-ounce fresh beef hit a record $3.75 per pound ($12.53 AUD/kilogram), but the US did not pay a record price for Australian beef.

“They’re not paying record prices for Australian beef yet,” Mr Quilty told ABC Landline.

“At the moment they are paying about $2.50 per kilo less for the Australian product compared to the US fresh 90CL.

Competition from Brazil

Mr. Quilty said Brazil has shipped record amounts of beef to China in recent years, but with the Chinese economy slowing and U.S. demand increasing, the beef trade has changed, despite the tariffs.

“Brazil has already reached its quota for beef to the US in the first three months of this year, but they are still exporting beef outside that quota and paying a 26.4 percent import duty for it, because it is still a better alternative than exporting beef to China or other parts of the world,” he said.

“That’s how good the U.S. market is right now for Brazilian beef, compared to the rest of the world.”

He said Brazilian beef exports to the US had risen to 17,500 tonnes in June and he expected those volumes to continue for the next four months.

What now?

Meat and Livestock Australia’s Tim Jackson said the US herd rebuild “hasn’t technically started yet” but it was clear the herd decline was “definitely slowing” and weather conditions were improving.

He said cattle prices in Australia had started to rise this month with the national indicator for processed cattle now at its highest level since February 2023.

According to Mr Jackson, the rising price is 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”.

According to Mr Jackson, the key question for the rest of the year is China’s economic performance.

“The world’s largest beef importer and second-largest economy has seen a slowdown in key economic indicators,” he said.

Mr Quilty said it was interesting that the US became Australia’s largest sirloin market and that it was a sign that record demand for lean beef was “pulling out all the stops”.

He predicts that global beef prices will rise in the coming months, similar to the increases in 2014 and 2004.

Watch ABC TV’s Vastline on Sundays at 12:30pm or on ABC Review.