Why the Australian beef sector is set to benefit from Trump tariffs, why the US herd rebuild is not yet underway and why Brazil’s bid to gain whole-of-country FMD shapes as a global game-changer were among topics explored by a US market expert at last week’s 2025 WagyuEdge conference in Perth.

Erin Borror, the vice-president of economic analysis at the US Meat Export Federation, provided a comprehensive update on key supply, demand and macro factors driving the outlook for the global beef export market.

In particular she said the US tariff situation will create more opportunities for Australian beef, while overall a tight supply situation will get more intense over the next couple of years which should in turn provide some upside momentum for prices.

No beef shortage in the US yet

US has been increasing its production of Choice and Prime, and still seeing record high prices. So we haven’t even tasted shortage yet in the US.

“I know I hear a lot about ‘you have a beef shortage in the US’, well, we don’t have a shortage yet. We’ve had record prices because of record demand.”

Moderating feed costs in the US contributed to cattle being fed for longer and to heavier weights. While beef cow slaughter was down by 19 percent last year, beef production increased by 1pc.

“So again, no shortage in the US yet. That’s partially because we have enough heifers still going to into feedlots that are underpinning this production or this slaughter, plus the heavier weights, so that steer weight was up 2.5pc last year, and it’s up 3.5pc currently. It’s 950 pounds and that’s up about 23 pounds from this time last year.”

“Choice beef cutout is basically at record levels and that retail price as well. So it is a demand driven market.  We’re not into the shortage yet.”

I think the supply situation will get more intense over the next couple of years and that should provide some upside momentum for prices.

US herd rebuilding still not underway

The US was continuing to produce more beef with fewer cows, a long-term trend that would only continue.

“So I hear a lot of quotes on the herd size as the smallest you know since whatever.

“Irrelevant. We continue to be more and more productive, and that will be key to get us through this cycle as well.

“Our beef cow numbers will not come back to where they were. They never do. We have to produce more with fewer and that will happen again, eventually through this cycle, but you note that we have not yet fully bottomed out.

“And our beef cow replacement heifer number is at historically low levels, we’re already well below the 2014 low, and that share of replacement heifers against that beef cow inventory is also low. You haven’t seen that tick up at all.

 “So we do not see herd rebuilding yet.”

This was partly due to drought pressure, with many producers reluctant to pay record high prices for female cattle at high interest rates until they had some certainty in the form of good grass production.

“There are many reasons why we haven’t seen this rebuild yet, you also have a generation shift underway just to complicate things further.”

Ms Borror said the USMEF does not see an increase in US beef production until 2028 at the earliest, and was likely to follow a more gradual, saucer pattern. “It’s more like a saucer recovery this time. We don’t see a big fall off in that fed beef production until we really aggressively pull heifers out.”

Trump tariffs will create opportunities for Australian beef

The US has placed a 25pc tariff on all imports of steel and aluminium. Some of the US’ biggest beef markets also supply steel, aluminium and cars to the US, including Japan, Korea, Canada, Mexico and Europe.

“These huge markets for us are facing 25 percent tariffs on metal and autos. And those did not get delayed. So those are in play.

The EU is the only one of those countries so far to say it will retaliate on the US metal tariffs, meaning there is “a good chance” that US beef will face a higher tariff going into Europe probably in May.

While this potentially presents opportunities for Australian beef into the EU, there are also tremendous barries there too that Australia knows only too well, Erin said. “Nobody is happy with the EU deforestation regulation for example, and it’s not about traceability, it’s about entering geolocations for your load, and a huge paperwork burden for countries that have nothing to do with deforestation.”

China – “the US has basically lost the market”

Normally the process of renewing US beef plant access to China is simply a “paperwork exercise” where China updates US facilities in the cipher. Under the phase one agreement between the US and China, all Food Safety and Inspection Service (FSIS) approved plants in the US are still eligible to export to China.

“But this paperwork exercise actually turned into essentially a market closure, because the majority of our production expired on March 16th.”

“We have analysed the importance of this for our industry, essentially its $150 to $165 per head that we are losing now without the China market.

“And that’s about four billion dollars annually just lost value to our industry.

“And that’s because China provides this competing bid for all of our short plate, short rib, chuck short rib, all of those China items, all of those Asia items – without the China competing bid, it drops the value across every animal.

“And the point that we’ve been trying to convey to our government is that A you can’t offset the loss of China, and B, this is happening at the absolute worst time because our packers are paying record high prices for cattle, they have to be able to maximise the value of every animal they sell, and that can’t happen without China.”

While this created an opportunity for Australia, the issue of limited access of Australian plants to China would also make it difficult “to really come in and take our volume”, she said.

But she added that it was inevitable that big customers for US beef would now shift to Australia.

“They just don’t have a choice, and not only is it the tariff, but it’s also the concern of how China treats us or treats you as beef on clearance. So it’s very high risk.”

She said no one knows where China’s beef safeguard investigation will lead.

 Even though the US is out of the China market, she said the USMEF view is that “we really need China to keep buying to kind of keep the whole market together”.

Inflation reducing beef demand in Japan and Korea

Falling real incomes in Japan and Korea have been eroding demand for beef in both key markets.

“In Japan they are not used to any type of inflation and their real incomes actually fell for a few years.

“Companies can’t pass on higher prices because that consumer just can’t afford it. And unlike Americans, they won’t just put it on credit because we know Japan saves money. So they just trade down.

Beef exports from both Australia and the US are well below peak volumes.

“The Japan consumer just doesn’t have the purchasing power to be able to buy beef.

“And we’ve seen a huge increase in poultry in the market…. that weak yen and again the inflation in that market, not being able to handle it, has had a real impact on Japan’s total beef consumption.”

Why does the US export when it is currently a net importer?

In 2024 the US exported $10.5 billion worth of beef but also imported about $11.5 billion worth of beef. Why does it export beef when it is a net importer of beef?

“It’s all about adding value to every cut we produce,” Ms Borror explained.

“The US consumer benefits because we still service that market with the middles, and then we’re exporting more of those end cuts, because we get a premium in the export market.

“It still makes sense to import lean to meet that lean demand. Obviously offal and variety meats is the no-brainer… We have to export these items to be able to maximise the value of every animal.”

She said the US received an average premium of $1.14 for every pound it exported last year versus what it imported. “So another way of explaining – the only reason we explore is because it makes more money.”

Aus and US “complementary” beef competitors

Ms Borror said Australia and the US beef production cycles tend to alternate in a complementary way.

“We know that Australia in a way benefits the US, it’s helpful that we’re kind of complementary and that our cycles alternate.

“As in the past cycles when those US 90 percent lean trim prices surge, because we were harvesting fewer cows, we bring in more Australian lean and this is closely correlated.

“So actually in 2021/2022, you can see our 90s price in the green line was high and we weren’t pulling those Aussie volumes, because your production had rebounded enough yet, and then again once that product was available, you saw Australia shipments to the US really jump, and we kind of got back to that full correlation and we see that still up to today.

“…we just keep reminding that Australia is really important and we need to have your 90 percent lean trim coming in to help supplement our demand for burgers.”

She also provided some specific examples of how Australian and US product alternate market share.

“And just so you know, Australia has retaken the marinated case (in Korea). So we had taken back the marinated items so the ribs, the bulgogi, and then you won it back again. So you’ve pretty much retaken all of those marinated items which are huge, huge sales items for Costco for E-mart Traders for these big box stores. Not to mention the typical hypermarkets.”

Brazil’s FMD-free status potential global game-changer

Brazil supplies heavily into China, the US, the Middle East and also into southeast Asia.

They have recently overtaken the Philippines market, Ms Borror noted.

“Once they got more plants approved for the Philippines, they quickly jumped up to be the largest supplier of beef and pork and they were already the largest supplier of poultry.

“So it’s another just heads up that when Brazil comes in, when they get access, they really take over.”

Brazil has applied for FMD free status for the whole country. The World Organisation for Animal Health could grant that status at a meeting in late May.

 “There’s a chance that they get this status and it has already as I understand passed a scientific committee, and so it is quite possible that they go from having just limited States with the FMD free without vaccination status to the entire country.

“It doesn’t mean countries are going to quickly adopt that and just open all the way up to Brazil.

“It will take time but to me this is a huge game changer as far as Brazil being able to penetrate more markets.

“Youve probably seen in the press that they are pushing hard to get into Japan for example.”

Brazil’s exports surged last year with their growth in production, with much of increase on the female kill side.

“We do know they’ve been in pretty heavy liquidation for more than a year.

“Brazil’s cattle price now is up about 27 percent year-on-year, you are seeing these kills finally slow down.

“And so we should see some easing off on exports, but that hasn’t happened yet. Their exports set another record in March. They just continue to be kind of amazing and ship large volumes to the US.

“I think that might have partially been trying to get ahead of higher tariffs. Obviously, they filled the US others quota way back on January 17 and are now paying 26.4pc percent.”