Beef flows to overseas markets up but we're selling it cheap

Females currently on feed in the US will be marketed by then and the expectation is for a wet northern hemisphere spring which would see ranchers start to retain breeders in earnest, said prominent Australian analyst Simon Quilty, Global AgriTrends.

Live cattle futures and market information coming out of the US is also starting to indicate very high prices ahead and an increased sentiment to rebuild.

Even where the season had improved in the US last year, reports were that ranchers were initially paying down debt before looking to rebuild.

Speaking in Beef Magazine, Oklahoma State University Extension livestock marketing specialist Derrell Peel said a real factor last year was that producers sold stock on a good market in order to 'heal up financially' and having done that were now in better shape.

With the current US beef cow inventory the smallest it has been since 1961, the much-touted US herd rebuild and the shortage of beef it will deliver is expected to open big gaps for Australian beef to fill.

Dr Peel said the current ability to produce beef in the US was smaller than market potential.

Mr Quilty said the big momentum of that US supply gap would be felt in Australia's cattle market in 2025.

The US news was all good for Australia - it was just about timing, he said.

"We've been waiting and waiting and the opportunities keep being delayed but there are good signs now it is very close," he said.

Already, beef exports volumes to the US in January were 95 per cent higher than the five-year average, Episode 3 analysts reported.

Flows to all of Australia's key markets, which also include China, Japan and Korea, were significantly higher. Total volumes for January, at 75,585 tonnes shipping weight, were nearly 30pc above the five-year average overall.

However, Mr Quilty warned that volume being up was not a sign demand was.

"We've sold all that meat at discounted rates," he said.

"In China and Japan, there are still record volumes in store.

"In Japan, the stockpile is starting to come down - they are now where they were in May 2022 - but it is still at a high level."

Stone X's Ripley Atkinson said Australia's beef supply chain would be closely watching how exports to Japan and Korea play out as it would provide critical insight into how the pullback of US production was tracking.

"I'd be prepared to say within the next 12 months we'll see those monthly beef export records broken with the way supply is tracking, improving processor throughput, higher beef production and the growing middle class needing to be fed and demanding our product," he said.

"It's a matter of when, not if."

Rural Bank's February Insights said the 'other country beef quota', which allowed 65,000 tonnes of tariff-free exports of beef from Brazil to the US, was set to expire this month.

This is due to Brazil fulfilling just over 71pc of the total volume in January.

The ensuing tariff of 26.4pc for Brazilian exports to the US would likely to lead to a softening in export volume, providing further opportunities for Australian producers for the remainder of 2024, Rural Bank said.