Source: MEATINGPLACE, 10/20/16

U.S. beef exports will benefit from reduced competition from Australia in 2017 as producers there focus on rebuilding their herds, USDA’s Foreign Agricultural Service (FAS) said in a new report.

Australia was the world’s top beef exporter in 2015, with shipments totaling 1.9 million tons. Export growth was fueled by a significant liquidation of cattle stocks due to severe drought that halted pasture growth and slashed feed supplies. The drought led to a decline of nearly 2 million head in just two years.

A rainy 2016 has renewed Australia’s drought-stricken pastures and encouraged producers to retain stock for breeding. Producers are now focusing on rebuilding their herds, driving beef production and exports lower. In fact, herd recovery in Australia could take until the end of the decade, FAS said.

Cattle slaughter will decline for a third consecutive year due to tight supplies of slaughter-ready cattle. The greatest reduction will come from cows and heifers as female animals are diverted from meat production to breeding.

As Australia continues rebuilding in 2017, the U.S. cattle herd is expanding from its own cyclical low, with a second straight year of rising production and exports expected.

U.S. production is forecast up nearly 4 percent on larger cattle supplies and higher carcass weights. Exports will be buoyed by increased shipments to South Korea, Japan and Mexico, FAS said.

Brazilian production also will rise due to robust export demand, supported by a relatively weak real and market access improvements in China, Saudi Arabia and the United States. Argentine production will grow modestly as liberalization of the currency regime and removal of export taxes encourage producers to rebuild herds and increase carcass weights.

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