‘Only source left': Australia emerges as last man standing on beef exports
Despite being called out specifically by Mr Trump during his Liberation Day speech in April, Australian producers are currently the only foreign supplier left to the US.
Commonwealth Bank sustainable and agricultural economist Dennis Voznesenski said strong demand out of the US is pushing beef export prices further into record high territory.
'The US has largely four sources to import beef from abroad, being Mexico, Canada, Brazil and Australia,' Mr Voznesenski said.
'Mexico has a flesh eating bacteria called new age screw worm with the US closing the border to Mexico … Canada exports to the US are down 25 per cent from last year as they rebuild stock and as of August 1 President Trump plans to put a 50 per cent tariff on Brazil.'
The economist said US farmers currently have a multiple-decade low supply of beef, meaning they will need to continue to export from other countries.
'Typically with tariffs the objective is to onshore industry. With some products you can restart quickly, but with cattle it's just not how it works, ' Mr Voznesenski said.
Mr Voznesenski said Australia had since emerged as the final source of beef left for the US, with exports to America already up 30 per cent, even with the 10 per cent tariffs slapped on local producers.
'We are still waiting for the August 1 tariffs on Brazil and to see what actually happens, but afterwards it supports the demand for our product, so when you have higher beef prices it supports the price of cattle overall,' he said.
Meat and Livestock Australia says 2024-2025 is forecast to deliver Australia's highest ever beef production.
While high supply would usually dampen prices, it is coming at a time with strong global demand.
MLA market information and NLRS manager Stephen Bignell said all cattle indicators had surpassed $3/kg for the first time in three years.
In a wide ranging speech on April 2, dubbed Liberation Day for the US, Mr Trump took aim at foreign countries and announced an 'America first' policy.
'If you want your tariff rate to be zero, then you build your product right here in America,' he told foreign countries.
The President took aim at the Aussie beef producers.
'Australia bans – and they're wonderful people, and wonderful everything – but they ban American beef,' President Trump said.
'Yet we imported $3bn of Australian beef from them just last year alone.
'They won't take any of our beef. They don't want it because they don't want it to affect their farmers.'
The benefit to Australia's bottom line could continue for a while to come with it taking a couple of years for the US to build up domestic capacity.
But what is good for Australia's exporters could be bad for Aussie consumers who might see a spike in the price of beef when they go to the shops.
'Domestic prices do not live in isolation,' Mr Voznesenski said.
'If there is strong demand offshore and it pushes up the price of cattle broadly, it increases the price of beef.
'To keep any locally, it'll need to be competitively priced.
'So if you're an end user of beef in Australia and you sell it retail, then you need to be offering prices that are competitive enough to keep it on the market.'
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