Australian cows for grinding beef to fill US beef void

Victorian cow prices have smashed through the 400c/kg barrier while experts predict even higher returns as US demand reaches higher levels.

Some of the heaviest cows are returning $3800.

Australia has been tipped to play a bigger role in supplying grinding beef into the red-hot US beef market in the run-up to Christmas, raising questions about how high southern cow prices can actually go.

Beef cows sold to 478c/kg liveweight and dairy cows to 450c/kg at Mortlake on Monday, according to data collected by the National Livestock Reporting Service, and sales like this will continue to push southern markets ahead of the north.

Some of the heaviest beef cows are now returning over $3800 a head.

Victoria and South Australia are leading national saleyard averages and are currently the only states trending above the 400c/kg benchmark for slaughter beef cows.

Victoria started this week at 416c/kg, while South Australia was on 404c/kg, ahead of the NSW saleyard rate for cows at 397c/kg and Queensland at 360c/kg.

The price difference between the north and the south is all linked into supply, regions of Victoria and South Australia coming off drought-like conditions that resulted in an exodus of cattle and a percentage of the herd shifting north.

It is now showing up in how production is playing out, an example being last week’s official cattle kill which noted a 9 per cent lift in Queensland to 81,710 head. This was the highest weekly slaughter in Queensland since July. In contrast the Victorian and South Australian weekly cattle kills were both down 3 per cent.

And the US market is all about supply in 2025 and heading into 2026, with herd rebuilding yet to start across the US in any meaningful way to address its shortfall in beef.

Last week the United States Department of Agriculture issued its latest forecast for meat imports. The USDA is now suggesting the US will import 5.364 billion pounds of beef this year, in another step-up on its forecast. To put it in context, if this much beef is shipped into America it will mark an increase of nearly 16 per cent on the import volumes of 2024 which is equivalent to an extra 729 million pounds.

Questions are being raised about how high cow prices can go.

The figures have surprised some US analysts, including noted industry commentator Len Steiner of Steiner Consulting, who said such an outcome would represent uncharted territory for the industry.

“If this forecast proves correct, it would imply that beef imports in 2025 will outpace US beef exports by around 2.7 billion pounds,” Mr Steiner said. “This is more than a billion pounds higher than the trade gap last year and well above the 2014 cycle (when the US herd had also been sold down due to drought and was starting a rebuilding phase).”

The USDA has pinned its forecasts on Australia being the key country that can boost beef sales into the US in the lead up to Christmas. This role would have gone to Brazil which was the country with the largest beef sales to the US in the first half of this year, but its trade has been made virtually not viable from the Trump administration’s tariff regime which put Brazilian beef on a rate of 76.4 per cent from August.

The following data is how the USDA is forecasting beef imports will play out for the period August to December from the main supplying countries:

AUSTRALIA: 651 million pounds (up 12 per cent or 70 million pounds more than the same time in 2024);

CANADA: 438 million pounds (down 4 per cent or 18 million pounds less than in 2024);

MEXICO: 315 million pounds (up 20 per cent or an extra 52 million pounds);

NEW ZEALAND: 182 million pounds (up 5 per cent or 9 million pounds more);

URUGUAY: 148 million pounds (up 7 per cent or 10 million pounds); and

BRAZIL: 267 million pounds (down 70 per cent or 187 million pounds less than last August to December).

Australia has already been selling extra volumes of beef into the US due to its record high prices, but Mr Steiner said in his analysis it is unlikely that it can import the volumes suggested by the USDA.

He also queries Brazil’s ability to absorb the extreme tariffs of 76.4 per cent and still sell 250-plus million pounds into the US, particularly as it has taken a strong foothold into the Chinese market.

The flow of beef around the world has been disrupted this year by Trumps tariff regime and political stoushes with multiple countries including China and Canada. China was the third largest beef customer of the US before the Chinese Government delisted all American plants. This has benefitted the US in a way, as more of its beef has remained in its local domestic market which is at record levels.

online artwork Sept 17 jenny kelly

On the issue of price, the graphic above shows the latest trend line for 90CL (chemical lean) cow beef into the US. Converted into Australian dollar terms the rate went into record levels and crossed over the $11/kg shipped mark in late August and has been hovering up at that level since.

Australian slaughter cow prices have now moved up to better reflect the record money for grinding beef, after a period where farmers weren’t really benefitting due to seasonal issues and high cattle kills.

The current overall national price average for cows at 373c/kg liveweight is close to the all time record saleyard averages set in 2020 and 2021. But there is an argument the Australian cow market still has room to improve due to the record money for grinding beef into the US.