Shift in US Beef Industry Opens Doors for Australian Exports
Australia’s beef trade with the United States, traditionally centred around frozen lean meat for burgers, is poised for a significant shift. Due to the impact of drought on US beef production, there is a burgeoning opportunity for Australian exporters to supply larger volumes of higher-quality chilled grain-fed beef cuts to the US market.
Historical Context and Emerging Opportunities
Historically, Australia has not been a major exporter of chilled cuts to the US, primarily because the US has abundantly produced its own grain-fed chilled cuts.
However, visiting US meat and livestock analyst Len Steiner, who was in Australia earlier this month, believes that 2024 will present a substantial opportunity for Australian chilled grain-fed beef in the US. He predicts a decline in the US beef herd to about 86 million head, the lowest since the 1950s, leading to significant demand for quality chilled table meat.
Australian Beef in the US Market
Steiner anticipates that most of Australia’s chilled cuts trade will be directed towards the US food service sector, rather than retail, due to Country of Origin labelling in the US.
This new business for Australian 100-150-day grain-fed cattle would come in addition to Australia’s traditional trade in frozen lean beef trimmings and would not affect existing chilled beef niches in the US, such as high-value Wagyu or Certified Grassfed and Organic beef cuts.
JBS Global’s Perspective
JBS Global executives, including chief executive Gilberto Tomazoni and US beef division head Wesley Batista, have acknowledged the growing importance of Australian grain-fed beef in the US market. They see this as an opportunity arising from limited US domestic beef production next year, with Brazil and Australia poised to fill the gap.
Trend Already Underway
According to one of Australia’s largest grain-fed beef producers and exporters, this trend has already begun, with larger US end-users exploring Australian grain-fed beef. Some new customers have started with trial shipments, gradually increasing their orders as confidence in the product grows.
Chilled Exports on the Rise
There has been a steady recovery in the volume of Australian exports to the US throughout 2023, with a notable increase in the chilled proportion of these exports. This trend is expected to grow significantly in 2024, driven by high US cattle prices due to scarcity and a growing gap in the US wholesale market between USDA Choice and Select grade beef and Australian equivalent grain-fed beef.
Potential for Diverse Cuts
The interest from US food service customers is expanding beyond loin cuts for steaks to include other items like rostbiff, flats, knuckles, point-end briskets, and more.
However, short ribs and forequarter meats like chuck and blade are not yet in demand.
Challenges and Expectations
Australian exporters face challenges in aligning with US trading language and standards. They are working to establish that their product is equivalent to the upper two-thirds of USDA Choice.
The expectation is that greater chilled exports to the US next year will put competitive pressure on traditional chilled export markets like Japan, Korea, China, and the Australian domestic market.
