Australian cow market takes off as tariffs loom and US burger prices rise
Heavy cows, light cows, it didn't matter. If they had four legs, they were in hot demand.
At Roma on Tuesday, processors forked out $4.40 a kilogram for heavy cows, which livestock agent Geoffrey Maslen said was incredible.
"Records were smashed here at Roma. In my 21 years, I can't remember cows getting $4.40 a kilo," he said.
The national processor cow indicator jumped 46 cents a kilogram this week and is close to its record high reached in 2022.
Meanwhile, the national dairy cow indicator is at an all-time high of $3.51 per kilogram.
At Echuca on Wednesday, some dairy cows made $3.90/kg, selling for nearly $3,000 each.
Processors are forking out record money for Australian cows, while the US is handing over record money for lean imported beef.
The US cattle herd is at its lowest point since the 1950s due to drought, and its supply of beef for making hamburgers is tight.
StoneX Australian livestock and commodities manager Ripley Atkinson said US demand for beef was strong, but Aussie processors were worried about the pipeline of cattle available.
"What's fundamentally driving the cow market at the moment is the southern processors and exporters looking to source slaughter stock to maintain kill chains [in abattoirs], maintain their workforce and operate their facilities," he told ABC Landline.
"The recent rain in southern Australia, on the edge of spring, has tightened the physical cattle supply and forced those processors to compete harder in northern markets — and that added competition is driving the market."
The US has relied heavily on beef imports from Australia and Brazil this year, but is now getting ready to enforce a 50 per cent tariff on Brazilian beef.
The tariff is due to take effect on August 7.
Episode3.net analyst Matt Dalgleish said the Brazil tariff would bring its beef trade with the US to a halt.
"I don't think we're going to see too much Brazilian beef go into the US for the rest of this year, and that will provide opportunities for Australia because our tariff is still at 10 per cent," he told the Country Hour.
"So it puts Australia in an even better position.
ABC Landline has been told some Australian processors may have paid extra for cows this week in expectation of tariffs stopping the Brazil beef trade to the US.
Global Agritrends analyst Simon Quilty said the cow price hike was "not really about burgers, it's about the lack of throughput for southern processors".
He also said the federal government's controversial decision to allow US beef imports looked to have "paid off", with Australia avoiding a Trump tariff hike — for now.
Watch ABC TV's Landline at 12:30pm on Sunday or on ABC iview.
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