This year’s Australian beef supply surged and is projected to reach the second-highest production level on record next year, according to a report from the USDA’s Foreign Agriculture Service in Canberra, Australia.
That anticipated expansion follows a major turning point in 2024, with production estimated to increase by 14% from 2023 and 34% from the 2022 low, the FAS report said. This recovery is driven by strong US demand linked to our own cattle supply shortage, resulting in heightened Australian exports and making the US Australia’s largest beef export market.
AUSTRALIAN BEEF SUPPLY REBOUNDS
The previous peak in 2014 was largely driven by destocking because of drought conditions, the FAS said.
Australia’s herd-rebuilding phase is complete, but strong demand for beef from the US, which is entering its own herd rebuilding phase, has led to a higher-than-expected female cattle slaughter to meet export needs, the FAS said. This has resulted in a slight reduction of Australia’s national herd, a trend expected to continue into 2025.
The US has become Australia’s largest beef export destination, accounting for 25% of total exports in the first half of 2024, the FAS said. This strong demand was forecast to result in record beef exports in 2025, slightly surpassing the anticipated 2024 export record by 1.1%.
With the increased beef supply expected to continue through 2025, Australia’s domestic beef prices have declined while pork and chicken prices have risen, the FAS said. Additionally, 2024 salary growth has outpaced the consumer price index by a small amount for the first time since early 2021, easing the cost-of-living pressures that had built up in previous years.
Australia’s population growth also was expected to remain robust in 2025, leading to a projected 2% increase in domestic beef consumption, the FAS said.
AUSTRALIAN PORK PRODUCTION SEEN HIGHER
Meanwhile, Australian pork production was forecast to grow by 2% in 2025, continuing the robust growth trend seen over the past four years, the FAS said. Despite stable projections for pork imports and exports in 2025, the US has re-established itself as Australia’s primary source of pork imports in the first half of 2024.
That increase in pork production was expected to boost domestic consumption by a similar margin, while pork imports and exports were projected to remain stable, the FAS said. In the first half of 2024, the US regained its position as Australia’s primary source of pork imports, accounting for about half of total imports.
2025 population growth was expected to continue outpacing the growth in pork consumption, the FAS said. However, the rise in beef and lamb prices over the past two years moderated the growth rate of pork consumption.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $181.20 per cwt to $181.84, compared with last week’s range of $179.95 to $184.00 per cwt. FOB dressed steers, and heifers went for $284.67 per cwt to $284.94, compared with $283.90 to $289.32.
The USDA choice cutout Monday was down $0.34 per cwt at $304.57 while select was down $2.03 at $292.14. The choice/select spread widened to $12.43 from $10.74 with 96 loads of fabricated product and 38 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $368.24 per cwt, and 50% beef was $119.36.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.04 to $0.06 at $1.35 to $1.47 a bushel over the Dec corn contract, which settled at $4.10 3/4 a bushel, down $0.02 1/2.
The CME Feeder Cattle Index for the seven days ended Friday was $242.68 per cwt, down $0.64. This compares with Monday’s Sep contract settlement of $241.30, down $0.60.