‘Few sources left’: Australia emerges as last man | Australian Markets

Australian beef producers are cashing in on US President Donald Trump’s crackdown on imports, with restricted stock seeing costs soar.

Despite being known as out particularly by Mr Trump during his Liberation Day speech in April, Australia is presently one of the few giant remaining international suppliers left for the US.

Commonwealth Bank sustainable and agricultural economist Dennis Voznesenski mentioned robust demand out of the US is pushing beef export costs additional into document high territory.

“The US has largely four sources to import beef from abroad, being Mexico, Canada, Brazil and Australia,” Mr Voznesenski mentioned.

“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 mentioned US farmers presently have a multiple-decade low provide of beef, which means they are going to need to proceed to export from different international locations.

“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 mentioned.

Meat and Livestock Australia says 2024-2025 is forecast to ship Australia’s highest ever beef manufacturing.

While high provide would normally dampen costs, it’s coming at a time with robust world demand.

MLA market data and NLRS supervisor Stephen Bignell mentioned all cattle indicators had surpassed $3/kg for the primary time in three years.

In a vast ranging speech on April 2, dubbed Liberation Day for the US, Mr Trump took purpose at international international locations and introduced an “America first” coverage.

“If you want your tariff rate to be zero, then you build your product right here in America,” he instructed international international locations.

The President took purpose on the Aussie beef producers.

“Australia bans – and they’re wonderful people, and wonderful everything – but they ban American beef,” President Trump mentioned.

“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 backside line may proceed for a whereas to come back with it taking a couple of years for the US to construct up home capability.

But what is sweet for Australia’s exporters might be unhealthy for Aussie shoppers who may see a spike within the price of beef after they go to the retailers.

“Domestic prices do not live in isolation,” Mr Voznesenski mentioned.

“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.”