Viewpoint: Australia cattle industry faces pivotal year

Market: Agriculture
14/12/22

Australian cattle markets face a pivotal year in 2023 with there never being a La Nina weather trend for four years in a row. Rising herd numbers and the likelihood of a drier second half of the year will increase cattle availability and rebalance pricing power towards processors.

Slaughter numbers in Australia started 2022 at 72,477 head a week and only exceeded 100,000 head a week three times in July and August. But 2022 finished strongly with the last week of November reaching 105,093 head, the highest kill number for the year so far. Droughts in Australia in 2019 caused producers to liquidate the herd, sending annual slaughter numbers to 8.5mn head for the year. But this has dropped since because of La Nina delivering above average rainfall, reducing kill numbers by 44pc to 4.8mn head in 2021. Slaughter numbers for 2022 will likely fall further with kill numbers at 4.23mn head with three weeks left in the processing year.

Four years of deep herd liquidation and minimal heifer retention in the US because of a constant drought will finally take its toll on US beef production, Netherlands-based Rabobank predicted. US beef production will fall by 3pc in 2023, or 400,000-500,000t of annual beef production. If the US experiences drought-breaking rain producers will turn to herd rebuilding, which will cut beef production further. The US will look to the global market to fill this void through imports, creating increased export opportunities for others, including Australia.

Saleyard numbers in east Australia remained low in 2022 because of logistics issues from above average rainfall and accessing wet and soggy paddocks. Dalby, Queensland saleyards penned over 6,000 head once in early June and for the majority of the year this remained between 1,500-4,000 head.

The influence of herd retention on producers and weather impeding cattle movements has increased herd numbers across southern Australia. There were 24.4mn head of cattle in Australia in 2021, according to the Australian Bureau of Statistics. The Australian herd rebuild continued its two-paced environment in 2022, rising nationally by 5.6pc to 27.6mn head predicted by Meat and Livestock Australia. Significant challenges around processor capacity and throughput affected the full potential for production in Australia in 2022, including staff shortages, high cattle prices, logistics issues, Covid-19 lockdowns and struggling meat sales. Many of these issues have been or are being resolved, increasing capacity in 2023. Increased cattle supplies will put downwards pressure on the feeder steer price.

Weakening threats

The threat of foot and mouth disease (FMD) entering Australian shores is weakening because of Indonesia's expanding cattle vaccination programme, combined with upgrades to biosecurity and Australia's funding of Indonesia's response and recovery.

Cattle exports fell instantly after the outbreak because of Indonesia's reduced demand. Australia's cattle exports have started recovering following the FMD outbreak in May 2022, exporting 65,076 head in October that was an increase of 18,317 head from September.

Australia's experience of La Nina during 2010-11 kept cattle prices higher because of a lack of available cattle from herd rebuilding. The Eastern Young Cattle Indicator (EYCI) averaged 404Ac/kg in January 2012 as the country moved back to a period of average rainfall, then dropped by 18pc to finish the year at 330Ac/kg. A fall in cattle prices is already evident with the EYCI starting November 2022 at 1023Ac/kg and finished the month at 885Ac/kg. History implies cattle prices will fall in 2023, although how quickly will be determined by how much pasture producers have to retain their cattle.

By Jessica Clarke

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08/04/25

South Korean beef imports to remain flat, demand falls

Sydney, 8 April (Argus) — South Korea's beef imports are expected to remain flat in 2025, tempered by lower domestic consumption and a tighter US supply outlook, according to the US Department of Agriculture's (USDA) Foreign Agricultural Service (FAS). South Korea is forecast to import 574,000t carcass weight equivalent (cwe) of beef in 2025, down slightly from 577,000t in 2024, because of falling domestic consumption, higher prices of imports, and competitive pricing of local beef. The country's beef imports have been declining since 2023, curbed by a stronger US dollar and domestic supply. Domestic beef consumption is expected to decline by around 2pc on the year, as the South Korean economy slows and consumer demand for higher-priced domestic beef and imported premium muscle cuts dampens, according to FAS. South Korea imported 47pc of its beef from the US and 46pc from Australia in 2024, according to FAS. But the US cattle herd has declined to its lowest level since 1951 in 2025, which could shift market share in Australia's favour. South Korea's imports of Australian beef rose to 45,000t in January-March 2025, up by 10pc from the same period in 2024, Australia's Department of Agriculture, Fisheries and Forestry (DAFF) data show. Australia's share of imports could rise further if South Korea implements countermeasures after the US applied 25pc tariffs on the country's exports on 2 April. But South Korea will remove the 2.6pc tariff on US beef from January 2026 under an existing Free Trade Agreement, giving the US a significant competitive advantage over Australian products. Australia's ability to gain additional market share is also limited by the safeguard quota of 192,206t for 2025 under the Korea-Australia Free Trade Agreement (KAFTA). A tariff of 24pc is applied if volumes rise above this level. Australia exported 200,545t of beef to South Korea in 2024 — more than 8,000t above the 2024 safeguard quota. By Grace Dudley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Flooding on US rivers mires barge transit

07/04/25

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07/04/25

Flooding on US rivers mires barge transit

Houston, 7 April (Argus) — Barge transit slowed across the Arkansas, Ohio and lower Mississippi rivers over the weekend because of flooding, which prompted the US Army Corps of Engineers (Corps) to close locks and issue transit restrictions along the waterways. The Corps advised all small craft to limit or halt transit on the McClellan-Kerr Arkansas River Navigation System (MCKARNS) in Arkansas because flows reached above 200,000 cubic feet per second (cfs), nearly three times the high-water flow. The heavy flow is expected to persist throughout the week, posing risks to those transiting the river system, said the Corps. Some barges have halted movement on the river, temporarily miring fertilizer resupply efforts in Arkansas and Oklahoma in the middle of the urea application season. The Corps forecasts high flows to continue into Friday, and the National Weather Service predicts several locations along the MCKARNS will maintain a moderate to minor flood stage into Friday as well. Both the Arthur V Ormond Lock and the Toad Suck Ferry Lock, upriver from Little Rock, Arkansas, shut on 6 April because of the high flows. Flows along the Little Rock Corps district reached 271,600cfs on 7 April. The Corps forecasts high flows to continue into Friday. Ohio and lower Mississippi rivers The Corps restricted barge transit between Cincinnati, Ohio, and Cairo, Illinois, on the Ohio River to mitigate barge transportation risks, with the Corps closing two locks on the Ohio River on 6 April and potentially four more in the coming days. Major barge carrier American Commercial Barge Line (ACBL) anticipates dock and fleeting operations will be suspended at certain locations along the Mississippi and Ohio rivers as a result of the flooding. NWS forecasters anticipate major flooding levels to persist through the following week. Barge carriers also expect a backlog of up to two weeks in the region. To alleviate flooding at Cairo, Illinois, where the Ohio and Mississippi Rivers meet, the Corps increased water releases at the Barkley Dam on the Cumberland River and the Kentucky Dam on the Tennessee River. The Markland Lock, downriver from Cincinnati, Ohio, and the Newburgh lock near Owensboro, Kentucky, closed on 6 April. The Corps expects the full closure to remain until each location reaches its crest of nearly 57ft, which could occur on 8 or 9 April, according to the National Weather Service (NWS). Around 50 vessels or more are waiting to transit each lock, according to the Lock Status Report published by the Corps on 7 April. The Corps also shut a chamber at both Cannelton and McAlpine locks. The John T Myers and Smithland locks may close on 7 April as well, the Corps said. The Olmsted Lock, the final lock before the Ohio and Mississippi rivers, will require a 3mph limit for any traffic passing through. The NWS expects roughly 10-15 inches of precipitation fell along the Ohio and Mississippi River valleys earlier this month, inducing severe flooding across the Ohio and Mississippi River valleys. A preliminary estimate from AccuWeather stated an estimated loss of $80-90bn in damages from the extreme flooding. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Tariffs and their impact larger than expected: Powell

04/04/25

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04/04/25

Tariffs and their impact larger than expected: Powell

New York, 4 April (Argus) — Federal Reserve chairman Jerome Powell said today tariff increases unveiled by US president Donald Trump will be "significantly larger" than expected, as will the expected economic fallout. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell said today at the Society for Advancing Business Editing and Writing's annual conference in Arlington, Virginia. The central bank will continue to carefully monitor incoming data to assess the outlook and the balance of risks, he said. "We're well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell added. "It is too soon to say what will be the appropriate path for monetary policy." As of 1pm ET today, Fed funds futures markets are pricing in 29pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 99pc odds of at least a quarter point rate cut in June. Earlier in the day the June odds were at 100pc. The Fed chairman spoke after trillions of dollars in value were wiped off stock markets around the world and crude prices plummeted following Trump's rollout of across-the-board tariffs earlier in the week. Just before his appearance, Trump pressed Powell in a post on his social media platform to "STOP PLAYING POLITICS!" and cut interest rates without delay. A closely-watched government report showed the US added a greater-than-expected 228,000 jobs in March , showing hiring was picking up last month. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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New tariffs could upend US tallow imports

03/04/25

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03/04/25

New tariffs could upend US tallow imports

New York, 3 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. 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Funding cuts could delay US river lock renovations

03/04/25

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03/04/25

Funding cuts could delay US river lock renovations

Houston, 3 April (Argus) — The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year. Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending. No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget. River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennesee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed. There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock and Lock 25 on the Illinois River; and the Montgomery Lock on the Ohio River. There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map) . By Meghan Yoyotte Corps active construction projects 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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