Beef and veal

The gross value of beef, veal and live cattle production is forecast to rise to a record $16.3 billion in 2024–25, up by 19% from an estimated $13.7 billion in 2023–24 (Figure 1.1). This represents the largest percentage increase in production value in a decade. Rising production values reflect higher cattle saleyard prices and a small increase in beef production. Saleyard prices are forecast to rise as processor demand rises by more than supply. Rising production volumes are driven by increased slaughter volumes as young cattle from recent herd rebuilding reach production maturity.

The gross value of beef, veal and live cattle production in 2024–25 is forecast to be $1.7 billion higher than expected in the June 2024 Agricultural Commodities Report. This reflects an upwards adjustment to average saleyard prices for cattle reflecting recent price data.

The value of beef, veal and live cattle exports are forecast to increase to a record $14.0 billion in 2024–25, up by 6% from an estimated $13.3 billion in 2023–24 (Figure 1.2). Higher export values reflect:

• Live cattle export values are forecast to rise by 25% to $1.1 billion in in 2024–25. This increase reflects higher export volumes and prices for both live feeder/slaughter and breeder cattle exports.
• Beef and veal export values are expected to rise by 4% to $12.9 billion in 2024–25. Rising world beef demand – driven by the United States – and higher Australian beef production expected to increase export volumes in 2024–25.

The forecast value of beef, veal and live cattle exports for 2024–25 is forecast to be $0.7 billion higher than expected in the June 2024 Agricultural Commodities Report. This reflects an upwards adjustment to both beef export prices and volumes.

Figure 1.1 Gross value of annual beef, veal and live cattle production

Figure 1.2 Value of annual beef, veal and live cattle exports

Higher prices driven by stronger demand from processors

Average cattle saleyard prices are forecast to rise by 29% to 602 cents per kilogram (carcase weight) in 2024–25, from 466 cents per kilogram in 2023–24 (Figure 1.4). The forecast recovery in saleyard prices reflects saleyard demand for cattle rising by more than the increase in turnoff and supply of cattle to saleyards. Elevated beef export prices – driven by near peak US beef import demand as continued US herd destocking leads to a decline in US beef production – are expected to increase domestic processor demand and drive-up local saleyard prices. Restocker demand is also expected to rise in 2024–25 – but remain relatively subdued – with improved seasonal conditions and pasture availability.

Despite this strong rise, average cattle saleyard prices are expected to be 5% below the 10-year average to 2023–24 in real terms. Expected prices in 2024–25 are rising from a low level as the fiscal year average price in 2023–24 includes the low prices in late 2023 (see Livestock Prices). Below-average prices expected in 2024–25 reflect the relatively high availability of cattle for slaughter; this will likely limit buyer competition and weigh on saleyard prices for processor-ready cattle.

The Bureau of Meteorology declared the end of El Niño in mid-April, announcing that the El Niño–Southern Oscillation (ENSO) has shifted into a neutral phase. In 2024–25, climatic and production conditions for livestock are assumed to improve relative to 2023–24 to be above the historical average across much of Australia (see Seasonal Conditions).

Despite expectations that Australia's cattle herd will fall over 2024–25, herd numbers are expected to remain near the five-year average, reflecting above average pasture availability across northern and most of eastern Australia and below-average saleyard prices (Figure 1.3). However, despite recent rainfall, large parts of Western Australia and South Australia are seeing very low pasture availability. Elevated supplementary feed costs are also expected to drive higher turn-off in Western Australia.

Figure 1.3 Pasture biomass percentile at 31 July 2024

Rising beef export prices driven by increased demand from the United States

Australian beef export prices are forecast to rise, driven by strong demand from the United States (Figure 1.4) and falling world supply. Declining US production, preferential market access for Australian beef, and a relatively weak Australian dollar are expected to support strong US demand for Australian beef exports throughout 2024–25 (Box 1.2).

The difference between beef export prices and Australian saleyard prices for cattle is expected to close slightly but remain elevated in 2024–25. This gap between export prices and domestic prices is expected to support strong profitability for export-orientated processors and strong processor demand in saleyards. However, improved domestic saleyard demand is expected to increase domestic saleyard prices, partially closing the gap to export prices. Australian lean ground beef export prices to the United States (measured by the US90CL in Figure 1.4) are expected to remain particularly strong due to declining US production of lean trimmings and strong demand. However, prices for exports of alternative cuts of Australian beef to other markets are expected to rise by less.

Figure 1.4 Average annual cattle saleyard price and beef export price

Figure 1.5 Annual Australian meat production and export volumes

Beef and veal production and exports to rise with increased slaughter

Australian beef and veal production volumes are forecast to rise by 2% to 2.5 million tonnes (carcase weight) in 2024–25 reflecting higher slaughter volumes (Figure 1.5). Despite improved seasonal conditions relative to 2023–24, cattle turn-off and slaughter are expected to rise. The Australian cattle herd is forecast to decline by 4% to 28.7 million head in 2024–25, which is around the average size over the five years to 2022–23 (Box 1.1). Significant rebuilding activity in the beef herd from 2020–21 to 2022–23 resulted in a younger beef herd. As these animals are now reaching production maturity, turn-off of cattle for slaughter is expected to increase. Increased domestic beef production is expected to lead to a 3% increase in Australian beef and veal export volumes in 2024–25 (Figure 1.5).

Slaughter capacity is expected to continue rising throughout 2024–25 as recent investments in expanding processing capacity become operational. However, slaughter volumes are expected to rise at a slower rate than in 2023–24. Elevated export prices are expected to incentivise processors to expand slaughter capacity, especially in early 2025 with the expected peak in US import demand. Although sourcing labour remains a challenge in the processing sector, labour supply is not expected to substantially constrain growth in processing capacity during 2024–25.

Box 1.1 ABARES historical cattle herd numbers revised higher due to change in scope

On 14 June 2024 the ABS released Australian Agriculture: Livestock, a new publication that marks the first release of agricultural statistics using new methods and data sources. This release included a new experimental estimate of the number of cattle in Australia that provides a more complete estimate of total cattle in Australia compared with past survey estimates which did not include cattle on smaller farms.

The change in scope has driven a substantial increase in the number of beef cattle in Australia (Figure 1.6). For example, the beef cattle herd new experimental model-based scope is 4.3 million head larger at 30 June 2019 than the historical survey-based scope.

The specific differences between the historical survey-based scope and the new experimental model-based scope are that the historical survey-based scope only included cattle on farms with an estimated value of agricultural operations (EVAO) above $40,000 and did not include cattle on feed. The experimental model-based scope includes cattle on all commercial beef farms and includes cattle on feed.

These experimental herd estimates are created using a beef cattle herd model that takes the closing stock from a previous period, adds population inflows (using non-ABS data to estimate new calves), subtracts population exits (ABS data) and arrives at a closing stock in the current period. More detailed information on this model can be found on the ABS's methodology webpage.

Figure 1.6 Annual estimated beef cattle herd size using different ABS methodologies

Live export volumes to rise with higher turn-off

Live cattle export volumes are forecast to rise by 15% to 764 thousand head in 2024–25, driven by live feeder/slaughter cattle:

• Live feeder/slaughter cattle exports are forecast to increase by 15% to 703 thousand head in 2024–25. Export prices for live feeder/slaughter cattle are expected to remain relatively low compared to recent years, supporting demand from Indonesian buyers and increased export volumes.
• Live breeder cattle export volumes are expected to rise by 10% to 61 thousand head in 2024–25. Despite rising, live dairy breeder export volumes to China are forecast to remain subdued, reflecting the strong growth in Chinese milk supply over recent years and relatively low Chinese milk prices.

World beef demand is expected to rise in 2024–25, leading to higher world beef prices as world supply is expected to fall. Higher expected world beef demand reflects rising demand from the United States:

• United States demand for beef imports is expected to rise significantly in 2024–25 as US beef production falls (Box 1.2). This is expected to be partially offset by weaker consumer demand in the US with elevated beef prices and slower economic growth. US demand for Australian beef exports will be further supported by Australia’s preferred access status which increases the competitiveness of Australian exports in the US market.
• Japan’s demand for Australian beef exports is expected to improve in 2024–25. Low US beef export availability is expected to support improved Japanese demand for Australian beef exports (the US was the largest beef exporter to Japan in 2023). However, this is expected to be somewhat offset by relatively high import prices and a continued draw-down of Japanese beef inventories. High import prices reflect a weak Japanese yen and relatively elevated world beef prices as US beef export volumes fall.
• The Republic of Korea's demand for Australian beef is expected to rise in 2024–25 as falling US export volumes are expected to support demand for relatively cheaper Australian beef exports. This is expected to be partially offset by increased beef production in the Republic of Korea and subdued economic growth.
• China’s demand for beef imports in 2024–25 is expected to improve slightly. On 30 May China’s suspension on exports from five meat processing establishments was lifted with immediate effect, although suspensions remain on another two facilities. This is expected to provide some support to China's imports of Australian beef and veal products in 2024–25. However, this is likely to be somewhat offset by weak Chinese consumer demand and increased availability of other protein sources such as pork are expected to weigh on import demand for Australian beef.
• Brazil, Argentina and Uruguay are expected to remain major Chinese import sources reflecting competitive pricing, limited access for Brazilian beef exports to the US, and elevated beef production. Together, these countries accounted for around 75% of beef imports to China in 2023. Brazilian beef exports have limited market access into the US market and face a 26.4% tariff on their imports for most of the year. As a result, Brazilian beef exporters typically focus on servicing the Chinese market where they are more competitive. The value of beef exports to China and Hong Kong accounted for around two-thirds of Brazil's total beef export value in 2022–23.
• Australian beef products remain a relatively premium product compared to South American products. Chinese demand for Australian exports may be relatively more affected by continued weak Chinese consumer demand than cheaper beef exports from other countries.

Box 1.2 US beef import demand to remain strong, but elevated South American supply is weighing on prices

The United States has been a net importer of beef since January 2023 due to falling domestic production. The US beef herd remains firmly in a destocking phase due to dry seasonal conditions; the US cattle herd is currently at its lowest inventory level since 1951 and is forecast to continue declining. US beef production has begun falling which has supported strong growth in US demand for beef imports, with total import volumes growing by 20% in 2023–24. Australian beef export volumes to the US also grew significantly, up by 97% in 2023–24. USDA forecasts indicate that US beef import demand is expected to remain strong throughout 2024–25 as net US beef trade is expected to be at its largest deficit since 2008 (Figure 1.7).

Over the last decade, a strong relationship has existed between the US beef net trade balance and the Australian US90CL price (a US import price for Australian lean beef trimmings); when the United States shifts towards net beef imports, US import prices for Australian beef typically rise (Figure 1.7).

Figure 1.7 United States beef net trade balance and real US import price for Australian lean beef trimmings

However, despite a rapid increase in US beef import demand during 2023–24, the US90CL price has remained below the 10-year average (around 600 USc/kg) in real US dollar terms. The subdued response of import prices reflects a large volume of beef exports from South America to the United States despite most of these exports facing an out-of-quota tariff of 26.4%. US beef imports from South America grew by 21% in 2023–24 despite no change in quota restrictions. This was driven by increased exports from Brazil (up by 11%), Uruguay (up by 44%) and Argentina (up by 23%). In Brazil, weak Chinese demand, relatively low Brazilian cattle prices, a strong US dollar, and higher prices paid in the US have driven strong export volumes to the US despite Brazilian exports facing a significant tariff.

World beef supply in 2024–25 is forecast to fall. Expected higher world demand, and lower supply, are forecast to increase world beef prices. Lower world beef supply reflects expected lower beef production in the United States and Brazil more than offsetting higher production in Australia:

• United States beef production and exports are expected to fall as the US beef herd remains firmly in a destocking phase. This is forecast to constrain US beef production and export volumes throughout 2024–25.
  • Lower US beef production and exports are being driven by the continued contraction of the cattle herd. The US cattle herd entered 2024 at its lowest inventory level since 1951 and is forecast to continue declining throughout 2024 and early 2025.
  • US beef producers still face elevated interest rates and input costs. High cattle prices have incentivised some producers to continue selling cattle, despite improved feed availability allowing for herd rebuilding, to manage cash flow and interest payments. This has helped to keep cattle slaughter higher than expected and prolonged herd destocking.
• Brazil’s beef exports are forecast to fall slightly in 2024–25 as herd destocking slows, and the herd enters a restocking phase. Drought conditions in many beef producing regions have increased cattle turn-off, driving record beef production in 2023. However, destocking activity is expected to slow throughout the year, stabilising beef production and export volumes in late 2024. Restocking activity is expected to begin in the first half of 2025. Uncertainty regarding rainfall in Brazilian cattle regions represents a downside risk to the supply outlook: high rainfall, if realised, could promote a faster than expected onset of restocking activity, increasing cattle retention and reducing both beef production and export volumes.
  • A proposed tax reform could also reduce the export availability of Brazilian beef. The Government and National Congress are currently discussing whether to include meat products, including beef, in the basic food basket. If included, domestic beef sales would be granted a tax exemption. This would be expected to increase the affordability and domestic demand for beef in Brazil and reduce the availability of Brazilian beef for export, particularly in 2025.
  • The Brazilian government self-declared the entire country as free from Foot-and-Mouth Disease (FMD) without vaccination on 2 May 2024. The Brazilian government indicated that they will be making an application to the World Organisation for Animal Health (WOAH) for recognition of the new status in August 2024 with the aim of achieving formal WOAH recognition in May 2025. If Brazil is formally recognised as FMD-free, this would likely increase demand for Brazilian exports in key global markets.
• Argentina’s beef export volumes are expected to remain steady in 2024–25. Improving weather conditions are forecast to see a fall in production in favour of restocking, but this is expected to be offset by lower domestic demand which increases the availability of beef for export. Argentina's domestic beef demand is expecting to fall, reflecting uncompetitive domestic retail prices and the removal of export controls, which will increase the availability of beef for export.
  • The removal of export controls on 1 January 2024 caused Argentina's monthly beef export volumes to rise to the highest levels in 57 years despite domestic production remaining relatively stable.
  • China is expected to remain the top destination for Argentinian beef exports, accounting for around 80% of Argentinian export volumes in 2023. However, export volumes to the United States are expected to rise with increased US demand.

Biosecurity remains a key risk for the livestock industry

Foot-and-Mouth Disease and lumpy skin disease have both been reported in Indonesia and other countries to Australia's north. If introduced to Australia, these diseases would reduce market access for Australia’s exports and be extremely disruptive to Australia's cattle industry. The Australian Government is continuing to work with industry and the Indonesian Government to develop and strengthen prevention and preparedness measures. The incidence of FMD in Indonesia has stabilised, with case numbers now comparable to the 70 other countries where FMD is present.

Australian exports are well positioned to meet rising US beef demand

US demand for Australian beef is expected to increase over the outlook period driven by lower US beef production as the US beef herd enters its rebuilding phase (expected in 2025).

Australian beef exporters are well positioned to meet this expected rise in demand as Australia maintains preferred market access status with the United States. Only Canada and Mexico hold better access (no quota restrictions). In addition, beef production in Canada (the largest exporter of beef to the United States in 2023) is expected to fall, reflecting a long-term trend of falling beef cattle numbers. This will likely constrain Canada’s ability to service rising US beef import demand.

As of 1 January 2024, beef tariffs on Australian exports to the US have been fully eliminated under the Australia-US Free Trade Agreement – conditional on the US price-based safeguard for beef not being triggered. This gives Australia a significant competitive advantage against other large beef exporting countries, particularly those in South America, who have smaller quotas and an out-of-quota tariff of 26.4%. For example:

• Brazil – which was the fifth largest exporter to the US in 2023 – is included in the ‘Other Countries’ annual quota of 65 thousand tonnes of beef. This quota was filled on 27 February 2024. As a result, Brazilian beef exports are subject to the out-of-quota tariff of 26.4% for the remainder of 2024, reducing the competitiveness of Brazil’s beef exports in the US market. Despite facing this tariff, Brazilian beef export volumes have been unexpectedly high over recent months (Box 1.2).
• Uruguay – which was the sixth largest exporter to the US in 2023 – has an annual quota of 20 thousand tonnes of beef, of which 71% had been filled at 26 August 2024. Uruguay has met 95–100% of this quota over the last three years. However, the United States has imported large volumes of beef from Uruguay over recent months; if this trend continues Uruguay could fill its quota before the end of the year. If realised, this would likely increase US demand for Australian beef towards the end of 2024.