The scramble to get beef into China before Australia’s quota is filled for the year, along with continued soaring demand from the US, has pushed total exports to a new monthly record. Australia exported more than 152,000 tonnes of beef in May, the highest monthly volume ever. In fact, all of Australia’s top four markets increased their intake of beef last month, as our domestic slaughter remains at historical highs. But what happens when the out-of-quota Chinese tariff kicks in, and will there be pushback on volumes and pricing?
China is the hottest topic when it comes to beef exports at the moment, so let’s start there. As of the start of this month, Australia had fulfilled 90% of its annual quota set by China this year of 205,000 tonnes. As a reminder, that volume is roughly 65% of the amount of beef Australian sent to China last year, and any product over and above this will incur a 55% tariff. So far this year China has made up 20% of Australia’s beef exports, its highest market share since pre-covid, and taken 57% more volume than the five-year-average for the year-to-date. This includes a record volume for the month of May, 14% higher year-on-year.
The race for the Chinese market hasn’t been the only driving force of increased beef exports this year, with total volume up 14% year-on-year for 2026 so far. Year-to-date volumes to the US have jumped 13% from last year and are more than 50% above the five-year-average. May was Australian beef’s highest monthly total to the US since 2014, and despite this the 90CL imported lean beef price remains historically strong. While there is concern economic conditions in the US could start to have an impact on beef consumption, even in their peak BBQ season, a lack of product being exported from the US is also a significant boon for Australia.
A new outbreak of New World Screwworm has been identified in Texas in the past week, and while Steiner Reporting Group doesn’t see it having much impact on an already significantly diminished US supply, it does cause concern for further spread. The outbreak, coming out of Mexico, has seen live cattle trade stopped between the two countries and caused beef exports from Mexico into the US to rise significantly as well.
South Korea and Japan, with 16% and 15% of Australia’s beef export market share so far this year, round out the top four destinations. South Korea, which also has a quota, took its highest monthly total in May, and year-to-date it has taken 33% more Australian beef than last year. In 2025, the quota (after which a 24% tariff kicks in) wasn’t filled until September, while this year, it could be as early as next month. Year-to-date volumes to Japan have increased from 2025 by about 4%, and did increase in May, but still sat below the five-year-average for the month.
What about our competitors? Rabobank’s latest beef report shows global beef production was down 2.5% for the first quarter and predicts year-end volumes will be down 2.2% due to reductions in the US and Brazil. Looking to Brazil, and while their exports to the US lagged in May, it is thought to be because much like Australia they were rushing to get product into China before their own quota was fulfilled, which is expected to happen within the next couple of months. While it is expected Brazilian production annually will fall 4% this year, it has still had the highest year-on-year increase in exports to the US, over and above Australia, and that it is expected to increase further once their Chinese access is restricted.
What does it mean?
Both Australia and Brazil hitting their annual quotas for China sooner rather than later will definitely impact global trade, as both countries turn their focus to other markets, however the production decrease in the US, along with potential upside in other key markets once beef is more readily available, should bode well for Australian producers and exporters in the second half of the year. Also coming into the equation is potential increased restocker demand with improved seasonal conditions, potentially countering any downside from slowing esports.
Key Points
- Beef exports hit a new monthly record in May as exporters rush to get product to China before tariffs kick in.
- US demand is resilient against strong prices and plenty of product, with competition likely to ramp up in the second half of the year.
- Global beef production decline should support Australian exports in second half of year despite loss of China trade.
Click on figure to expand
Click on figure to expand
Data sources: Mecardo, Meat & Livestock Australia, Rabobank, Steiner Consulting Group, Mecardo
