We’ve been expecting a significant increase in demand for beef from the US for some time now, with a herd rebuild period for the country forecast as soon as seasonal conditions better allowed, or numbers got to a point where it didn’t matter. Australian beef exports to the country are more than 30% higher year-on-year for 2025 so far, remaining the biggest market. Australia’s ample supply, however, hasn’t begun to dampen US demand as it heads into peak beef barbecuing season.
The 90CL price in Australian dollars has sat above $10/kg for most of this year, peaking at 1097¢/kg in the first week of April. Last week it closed at 1024¢/kg, however, these figures are also dictated by the exchange rate. In US dollars, the Meat & Livestock US imported beef 90CL price indicator was at 312.50 US c/lb at the end of March, and last week closed very close to that at 311 US c/lb.
According to Steiner, domestic US prices for cattle and wholesale beef have been on the rise, due to cow slaughter continuing to trend lower and fed cattle numbers now also on the decline. In fact, for the past four weeks, fed cattle slaughter in the US was down 6.8% year-on-year, while cow slaughter was back 7.2%. Compared to two years prior, cow slaughter was more than 30% less. Meanwhile, the feeder cattle index price in the US was up nearly 24% year-on-year last week.
Australian beef exports for the year-to-date are at a record high of 567,624 tonnes, which is 15% above the same period last year. Volumes to the US in May were 108% above the five-year average, despite a 10% tariff being implemented in April. Last year, Australia sent just shy of 395,000 tonnes of beef to the US, volumes not eclipsed since Australia’s last peak supply period of 2014–15.
Domestically, obviously our slaughter rates have been strong enough to fill demand, but traditionally we can also find correlations in the impact on Australian cattle prices. Figure 1 shows us that the Eastern Young Cattle Indicator trades at a discount to the 90CL when the Australian herd is in a turnoff period. Similarly with the medium cow price, which always operates at a discount, but how much of one is seemingly dictated by rebuild or turnoff. Currently, the EYCI is at a 45% discount to the 90CL, and the medium cow 98%.
What does it mean?
Australian cattle prices, dictated by strong supply and failing southern seasons, have now been operating at a significant discount to the US price for more than two years, which is a longer than average period for the past decade at least. The forecast US herd decline seems to be eventuating, and as Australian numbers are expected to start to contract after this year’s peak slaughter, there should be clear upside for our domestic cattle price.
Key Points
- The 90CL lean beef export price is back in record territory as US domestic supply falls.
- Australian beef exports to the US were up 108% on the five-year-average for January-May.
- Potential for domestic cattle price upside as numbers begin to contract.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, Steiner, Mecardo
