US beef output dip offers export opportunity: Rabobank

Australian cattle prices will fall heading into 2023, while US beef production will drop, providing beef export opportunities for Australian producers, according to Netherlands-based Rabobank.

Favourable seasonal conditions are supporting herd rebuilding, although ample feed availability and higher cattle prices are seeing producers trade cattle rather than breeding them, Rabobank said in its latest global beef quarterly report. It expects Australian cattle prices to hold towards the end of this year before dipping in the new year as more cattle becomes available.

Australian slaughter numbers have stayed low because of issues around a lack of workers and weaker margins prompting plants to scale back operations. Slaughter numbers started the first week of September at 92,640 head and increased to 95,361 head for the last week of October. Kill numbers have fallen between 4-8pc compared with the same period last year.

Four years of deep herd liquidation and minimal heifer retention in the US because of a sustained drought will finally take its toll on the country's beef production, Rabobank said. It predicts US beef production will fall by 3pc in 2023, with additional falls of up to 5pc into 2026. This will account for 400,000-500,000t of annual beef production. The US will look to the global market to fill this void through imports, creating increased export opportunities for countries, including Australia.

The Rabobank report predicts beef production in the US will reach a new record of 12.8mn t in 2022 but with prime and choice beef cuts down by 5pc from a year earlier. A drop in quality marbled beef is attributed to cattle entering feed yards at a younger age and being processed younger.

By Jessica Clarke