INTERVIEW: Australian beef supply to hold steady in 2027, pressure to maintain exports

Australian beef production and export volumes are expected to remain broadly unchanged in 2027 compared to 2026, supported by favorable seasonal conditions and number of cattle on feed, with no major supply-side disruptions currently in sight, David Foote, the Director of DF Agri Food Advisory told Platts Sept. 25.

That stable production outlook, however, will place pressure on exporters to maintain market access, diversify sales and manage volatility across global supply chains, according to Foote.

Tighter South American supply

The likelihood of tighter supply from Brazil and Argentina could create opportunities for Australian beef in 2027. However, Foote said the potential for Australia to replace those supplies would depend on the product category and destination market.

Australian beef generally competes in different market segments from Brazilian and Argentinian beef. South American suppliers are typically more competitive in lower-priced and manufacturing meat markets, while Australian beef is more heavily positioned in higher-value foodservice, retail and premium segments, according to Foote.

"Apart from the trimmings market or the manufacturing meat market, we don't actually fight for the same shelf space," Foote said.

According to Foote, some opportunities could emerge in China's food service sector, where Australian main muscle cuts may be able to replace Brazilian or Argentinian beef in selected applications. But Foote does not expect Australian beef to capture a significant share of the manufacturing markets vacated by South American suppliers.

US herd rebuilding delays bullish

On the other hand, the US could offer a more significant opportunity. Recovery in the US cattle herd, previously expected to begin in late 2025 or during 2026, is now increasingly seen as delayed until 2028, according to Foote.

US demand is therefore expected to remain firm, supporting continued opportunities for Australian beef.

"So I still see great opportunity for manufacturing meat, and then potentially now other higher value cuts going in," Foote said.

Australian plants move further into US

Foote added that one of the most important structural changes in the Australian beef industry over the past five to ten years has been the expansion of Australian companies' further-processing presence in the US, with cutting, packing, and grinding facilities established in the US.

This infrastructure is increasingly being used for steak cuts, roasts, and other ready-to-cook products for retail and food services. The strategy is not limited to manufacturing beef but also enables Australian companies to respond to shortages in the US market, according to Foote.

China reinforces need to diversify

China's safeguard measures have already had a significant impact on Australian beef export, with close to 100,000 mt of volume having to be redirected, Foote said.

Australia's dependence on China had already declined from earlier levels. Some companies had previously been comfortable placing 50%-60% of their business in China, but most now aim to keep their exposure below about 30%, Foote said.

"The learnings from the tariff into China this year and the trigger into Korea are teaching Australia the importance of market diversification," Foote said, adding that the disruption has accelerated efforts to develop alternative markets across North Asia, Southeast Asia, and the Middle East.

A reduced US presence in Japan and South Korea has also created opportunities for Australian suppliers. Foote said that US beef was a more direct competitor to Australia in those markets than Brazilian or Argentine beef.

Australia is also seeking to develop demand in Thailand, Vietnam, Singapore, Malaysia and Indonesia, according to Foote. Foote does not expect Southeast Asia to offer huge growth prospects but views the region as increasingly important for defending market share against Brazil.

Brazil's efforts to expand access to Southeast Asia could add competitive pressure, particularly in lower-priced boxed beef. Foote expects Brazil to be well-positioned to gain share in lower socioeconomic markets.

UK opportunity

The UK is emerging as one of the clearest opportunities for Australian beef exports in 2027, supported by access under the Australia-UK Free Trade Agreement, according to Foote.

Australia has more than 100,000 mt of potential access to the UK market under the agreement, Foote said. Potential renewed or improved access to the EU could provide another outlet, although the EU remains a challenging market because of stringent supply chain and live-animal requirements.