The USA (US) holds a novel place in international beef markets because the world’s largest producer, client, second largest importer and fourth largest exporter of beef on this planet.
Because of the dimension of the US herd, fluctuations within the cattle cycle have impacts globally.
Herd dynamics
Regardless of indicators of an imminent herd rebuild in the beginning of 2024, the American cattle herd has shrunk over the yr. Heifer slaughter has partially compensated for lowered cow slaughter, retaining the herd in a liquidation part.
Yr-to-October, cow slaughter has declined 15% to whole 4.7 million head. Regardless of this lower, heifer slaughter has remained fixed at 8.3 million head.
The decrease cow slaughter numbers have decreased the depth of the US destock, although it has not stopped fully; within the year-to-October the feminine slaughter charge (FSR) ran at 49.7%. This charge is beneath the 51.4% seen within the first 10 months of 2023, nevertheless it’s nonetheless above the 47% tipping level.
The US cattle herd was 87.2 million head initially of 2024 (the bottom determine since 1951). There are sturdy indicators that in 2025, the herd will probably be smaller once more.
Supply: USDA, Steiner consulting, MLA
Manufacturing dynamics
Regardless of decrease cow slaughter, general beef manufacturing has lifted; for the year-to-October, 10.1 million tonnes of beef have been produced. It is a slight (0.3%) enhance on 2023 numbers.
The small enhance has been brought on by a considerable carry in steer and heifer carcase weights. To spice up manufacturing, processors have been extra keen to just accept heavier cattle, which means cattle have been spending extra time on feed.
In October, US steers averaged 430kg carcase weight (cwt), a report for steer weights. This has meant manufacturing from steers lifted 9% year-on-year in October, totaling 583,000 tonnes.
In distinction, declines in cow slaughter meant cow beef manufacturing fell by 10% year-on-year to 142,000 tonnes in October. Taken collectively, which means manufacturing of beef from cattle in feedlots has risen, whereas non-fed manufacturing has fallen.
Supply: USDA, MLA
Impact on Australian commerce
The decline in non-fed beef manufacturing has led to a shortfall in lean beef within the American market, creating an elevated demand for Australian beef.
Costs for imported 90CL beef within the US market reached a brand new report in July at 988¢/kg. Costs have been at close to report ranges all yr for lean imported beef.
The sturdy demand has powered exports into the US, ensuing within the US turning into the most important marketplace for Australian beef in 2024. Within the year-to-date exports have risen 66% to 317,532 tonnes, the most important export quantity to the US since 2015.
The carry in quantity has principally come from exports of frozen, grassfed, and manufacturing beef.
Trying ahead
Because of the decline in cow slaughter and the carry in steer carcase weights, American lean beef manufacturing is low whereas fed beef manufacturing is remaining comparatively excessive. If and when the rebuild kicks off in earnest, lean beef manufacturing will probably keep low and fed beef manufacturing will fall.
This can have two impacts. Firstly, it’ll imply that (all else being equal) import demand within the US market will rise for beef and protein extra broadly. It is usually prone to shift the import combine, with decrease provides of steaks and different primal cuts accessible domestically.
The opposite affect could be a discount in exports coming from the US. Slightly below 70% of US exports this yr have gone to Japan, South Korea or China. Decrease American exports would create a boosted demand for imported beef from different sources.
Though it’s unclear when rebuilding will start within the American cattle herd, it’s clear that actions within the herd may have international impacts. This might doubtlessly cut back international provide and supply alternatives for Australian exporters.
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