Australian beef exporters eye opportunities, challenges amid sweeping US tariffs

As meat market participants continue to navigate the maze of US President Donald Trump's sweeping tariffs, Australian beef exporters remain confident in demand prospects for Australian beef in 2025, with strong export demand anticipated from the US and Asia even in the face of challenges such as volatile foreign exchange rates.

Australian beef exporters that Platts, part of S&P Global Commodity Insights, spoke to at Food and Hotel Asia Singapore and the Meat Processing and Export Conference believed the US' demand for Australian beef was unlikely to plunge despite a 10% tariff on imports effective April 10, largely due to a diminished US cattle size of 86.7 million heads, which is the smallest herd size in 70 years, according to The Cattle report published by US Department of Agriculture's National Agricultural Statistics Service.

"We didn't see any difficulties in selling Australian beef to the US [despite the tariffs]. Demand is still good," a South Australian beef exporter said.

"About 4 weeks leading up to the tariff decision, the US was absent from the [Australian beef] market, and since the tariffs came out, some are still holding back until the market stabilizes," a meat trader from Brisbane said. "I think eventually, US buyers will have to pay up Australian beef as their herd size is too small to meet domestic demand."

An executive at a New South Wales beef processing company added, "This is just a bumpy stretch with typical ups and downs. It may take a few weeks for conditions to stabilize, after which business will return to normal."

In response to the tariffs, some beef exporters said they had seen requests for beef sales contract cancellations or renegotiations from US importers.

"The tariffs would typically fall on the importers' responsibility since our sales term is on a CIF basis," said another beef trader based in Brisbane.

A trader based in Japan who sells Australian beef said that his US customers were prepared to cover the tariff.

Meanwhile, a Queensland-based trader observed lower bids from US importers amid the tariffs. "Some buyers are now bidding 10% lower to account for the tariffs [imposed on Australian imports], but the Australian market has remained firm," he explained.

Platts, part of S&P Global Commodity Insights, last assessed 90CL beef FCA Australia at $6,355/mt on April 15, reflecting a 4.6% increase since Jan. 2. The 90CL Beef CIF US assessment was assessed at $7319/mt, up 13.3% in the same window.

Meanwhile, several Australian beef exporters observed increased inquiries from South Korea, Japan, and China seeking to divert some of their demand from the US to Australia. However, Australia is likely the only semi-substitute for high-value US grain-fed beef exports, given its limited ability to quickly address a short-term gap in the US supply to China, according to S&P Global Commodity Insights' APAC Head of Livestock and Meats, Jack Mullumby.

"It will likely be a very good year of business for Australian beef exporters," said a Brisbane-based beef trader.

Nonetheless, beef market participants are also cautious of market risks, primarily fluctuations in the strength of the Australian dollar against the US dollar, and its impact on their margins.

Several beef exporters also noted that weather concerns had weighed on the cattle industry. Recent wet weather in Queensland delayed cattle slaughter and delivery between March and April, while dry weather in South Australia and Victoria reduced pasture availability and drove more cattle into feedlots.

"Current feedlot utilization rates [in Australia] are at near-record highs, and the beef logistics supply chain is at capacity," added Mullumby.

Beef industry experts, during a panel session at MPEC, also cautioned Australian beef exporters and traders that the current tariff tensions may only be the beginning, adding that countries facing a 10% baseline tariff could soon encounter even higher tariff levels. Therefore, diversifying markets and exploring opportunities within the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and a Free Trade Agreement with the EU remained crucial for Australian beef exporters, added the panelists.