​All eyes on US herd recovery

All eyes on US herd recovery


The US is both a key competitor and market for Australian beef.

The United States is both a major market and a major competitor for Australian beef.

The United States is both a major market and a major competitor for Australian beef.

THE United States continues to take a growing share of Australian chilled grassfed exports, which head to food service and retail channels.

“US consumers perceive grassfed beef as more natural and sustainable, including in areas of animal welfare and the environment,” said Meat and Livestock Australia’s Scott Tolmie.

“This is helping grassfed beef to find its way onto more menus in the US.”

The strength in demand has meant that US import prices are currently tracking close to where they were this time last year, after taking a correction mid last year, despite the ongoing recovery in the US herd.

Following four consecutive years of expansion, the US herd is now at its largest since 2009.

The just-released USDA cattle inventory report has the US herd at 94.4 million head, up 0.7pc on the previous year – the smallest margin of increase since 2015.

Despite the fact as much as 60pc of the continental US is currently in a state of drought, the market sentiment at this stage appears to conclude that current drought conditions do not pose any longer term issues, according to Mr Tolmie.

“However, higher odds of La Nina weather patterns developing this spring and summer would see producers turnoff more cows and earlier than normal,” he said.

The US was four years into its current cycle and a number of indicators were now pointing towards expansion tapering off in coming years, Mr Tolmie said.

These include:

  • Cattle/calf profits in the US appear to no longer support expansion.
  • The increasing trajectory of the latest female slaughter percentage.
  • Beef replacement heifers were down 4pc from year-ago levels at 6.13 million head.
  • Beef exports to all key markets lifted in 2016/17 on the back of increased supply, with the biggest growth in Japan - one of Australia’s more lucrative markets.

Overall, US beef exports were valued at US$5.6 billion freight-on-board in the last financial year.

MLA’s market experts on the ground in Japan and Korea say those trading in Australian product are using more than price to guide their decisions.

“As a result, we are leveraging Australian beef’s stronger consumer perceptions in both Japan and Korea,” they said.

“We are also stressing our functional points of difference – that is superior safety record, longer shelf life, sensory evaluation scores to name a few.

“And we are educating key customers about the larger variety of cuts and styles Australia has to offer.”

The story ​All eyes on US herd recovery first appeared on North Queensland Register.


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