The Australian tariff into the US remains at 10%. Whether the additional import restrictions being lifted by the Australian government contributed to this, we will likely never know. What we do know is that the beef fundamentals in the US continue to provide significant barriers for participation in the Australian market, even with the slashing of red tape.
USDA cattle inventory data has the US herd declining to finish the 2024/25FY 1% lower YoY at 95.4 million head. The calf crop declined as well to 33.1 million head, which is the lowest on record (a dataset that stretches back to the 1970s). Tighter cattle availability will limit the scope for reducing US cattle prices and increasing beef production (and exports). The can keeps getting kicked down the road on the US herd rebuild.
On Mecardo this week, Jamie-Lee Oldfield had a look at the scale of Brazilian beef exports to the US this year so far (read more here). YTD beef exports from Brazil to the US have doubled, but will be under extreme pressure if proposed tariffs were to be implemented. This week’s executive order from the white house on trade with Brazil provided a significant number of goods that were exempt from tariffs, but beef was not on the list. An expectation of a 50% tariff on beef will now increase the US reliance on Australian product, and likely an increase in volumes from Brazil heading to China. So, this will take some shine off our recent improvement in trade with China, but overall, the trade policy developments this week will likely see the Australian beef industry better off from a volume and value point of view in the short term.
When we tie all of these bullish drivers for exports together with another drop in saleyard throughput, the result is another week of all indicators averaging double-digit improvements.
National yardings were 17% lower Week on Week, the lowest full working week of the year, as rain fell throughout southern Australia.
Supply was definitely a driver of the upward momentum in pricing, but the export fundamentals were likely front of mind, resulting in Processor cow indicators being best on ground, averaging a 46¢ lift to 374¢/kg lwt. Roma and Dalby saleyard reports cited strong competition amongst processors from all over the East Coast.
The Eastern Young Cattle Indicator (EYCI) shot up 50¢ to 822¢/kg cwt as feeders and restockers bid strongly for both steers and heifers. A bunch of rain kept yardings lower for yearlings, which helped boost motivation for acquiring stock.
The week ahead….
It’s onwards and upwards for the 90CL producers have been trying hard to get as many cull cows to market as they can justify, but demand continues to outstrip supply at the moment, which will continue to prop cattle markets up.
Cattle yardings jumped significantly this week across all categories on the back of positive price signals, but demand held up, with most indicators climbing higher
The latest quarterly Consumer Price Index (CPI) figures were released last week, and apart from denying us all an interest rate cut, they revealed that
With rain falling in parts of southern Australia in recent days, and more set to follow, there could be increased opportunity for restocker movement in
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Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.
US herd a bigger barrier than 10 or 20%?
USDA cattle inventory data has the US herd declining to finish the 2024/25FY 1% lower YoY at 95.4 million head. The calf crop declined as well to 33.1 million head, which is the lowest on record (a dataset that stretches back to the 1970s). Tighter cattle availability will limit the scope for reducing US cattle prices and increasing beef production (and exports). The can keeps getting kicked down the road on the US herd rebuild.
On Mecardo this week, Jamie-Lee Oldfield had a look at the scale of Brazilian beef exports to the US this year so far (read more here). YTD beef exports from Brazil to the US have doubled, but will be under extreme pressure if proposed tariffs were to be implemented. This week’s executive order from the white house on trade with Brazil provided a significant number of goods that were exempt from tariffs, but beef was not on the list. An expectation of a 50% tariff on beef will now increase the US reliance on Australian product, and likely an increase in volumes from Brazil heading to China. So, this will take some shine off our recent improvement in trade with China, but overall, the trade policy developments this week will likely see the Australian beef industry better off from a volume and value point of view in the short term.
When we tie all of these bullish drivers for exports together with another drop in saleyard throughput, the result is another week of all indicators averaging double-digit improvements.
National yardings were 17% lower Week on Week, the lowest full working week of the year, as rain fell throughout southern Australia.
Supply was definitely a driver of the upward momentum in pricing, but the export fundamentals were likely front of mind, resulting in Processor cow indicators being best on ground, averaging a 46¢ lift to 374¢/kg lwt. Roma and Dalby saleyard reports cited strong competition amongst processors from all over the East Coast.
The Eastern Young Cattle Indicator (EYCI) shot up 50¢ to 822¢/kg cwt as feeders and restockers bid strongly for both steers and heifers. A bunch of rain kept yardings lower for yearlings, which helped boost motivation for acquiring stock.
The week ahead….
It’s onwards and upwards for the 90CL producers have been trying hard to get as many cull cows to market as they can justify, but demand continues to outstrip supply at the moment, which will continue to prop cattle markets up.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: Farm Policy News, USDA, Farm Bureau, Steiner, Mecardo; Meat and Livestock Australia
Categories
Have any questions or comments?
Buyers face off as market climb continues
Cattle yardings jumped significantly this week across all categories on the back of positive price signals, but demand held up, with most indicators climbing higher
Retail red meat retreating
The latest quarterly Consumer Price Index (CPI) figures were released last week, and apart from denying us all an interest rate cut, they revealed that
Restockers emerging in the South?
Supply has been easing to the yards during harvest, which has provided support for the market so far, but emerging restockers from the south might
Season shores up cow price
With rain falling in parts of southern Australia in recent days, and more set to follow, there could be increased opportunity for restocker movement in
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.