In short:
Australia exported almost 130,000 tonnes of beef in July, setting a new monthly record.
A shortage in the US has led to high demand and record prices.
What’s next?
Export and farm gate prices are not “perfectly correlated”, according to Meat and Livestock Australia, but cattle prices are on the rise.
Australia exported 129,998 tonnes of beef in July, beating the previous monthly record set in March 2015.
Meat and Livestock Australia’s Tim Jackson said strong international demand combined with bigger carcass weights had lifted the beef industry to new highs.
“It’s the most beef ever exported by Australia in any month, and is up 34 per cent compared to July last year and up about 5 per cent on the previous record set in 2015,” he said.
“In particular, exports to the United States topped at 38,540 tonnes in July, which was up 61 per cent compared to July last year.”
Mr Jackson said the next biggest customers were Japan (26,297 tonnes), South Korea (20,331 tonnes) and China (16,249 tonnes).
He said the US was facing a shortage of lean beef to make hamburgers and was paying record money to import Australian product.
“This week just gone, the US imported beef price 90 [CL — chemical lean] reached $9.88 per kilogram, which is a record price and shows how the demand is going,” he said.
In its latest weekly report, Steiner Consulting said beef exports from Oceania and South American countries to the US in Q2 were 51 per cent higher than a year ago.
Meanwhile Global Agritrends is reporting that after three years of drought the US cattle industry has officially entered the herd rebuild stage, which is expected to push global beef prices even higher.
Mr Jackson said Australian cattle producers might not be seeing record prices at saleyards right now, but there were plenty of positive signs in the market.
“Export prices and farmgate prices aren’t perfectly correlated and it can take time to flow through [to cattle producers],” he said.
“But what’s really encouraging for the industry is that as Australia moves into a period of higher production, there’s demand for that product and it’s putting us in a strong position.”
In Australia, the national feeder steer indicator is currently $3.66 per kilo, which is up 45 cents since this time last year.
The national processor cow indicator is at $2.73 a kilo, which is up 49 cents since this time last year.
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