South America continues to build momentum, with improving market access, growing herds and undervalued currency favouring exports.
New MLA figures show that up to July beef exports from the big four South American producers (Brazil, Argentina, Paraguay and Uruguay) passed 2018 levels and sit just above 1.4 million tonnes and are tracking 18 per cent above last year.
China has clearly gained precedence, with the majority of exports pivoting away from Russia.
For the year to July beef exports there sit just under 500,000 tonnes, up 37 per cent on a year-ago, and accounting for 35 per cent total exports from South America.
Five years ago this figure was five per cent.
Demand is expected to keep building heading into the Chinese New Year in January 2020 as African Swine Fever bites into protein supply.
Considering the strong global demand for animal protein and the low value of the Argentine Peso and Brazilian Real relative to the US dollar, South American exports are expected to keep growing.
Despite increasing competition Australia maintains its status as a high-quality and reliable beef producer.
But as big South American countries continue to build market share MLA said it is important to continue analysing how their contribution to the global beef market will affect Australia.
Brazil has recently had some big market access wins, last month reaching an agreement to supply Indonesia with 50000 tonnes over the next 12 months and is a beneficiary of the Mercosur-EU trade deal.
However, the deal still needs to be ratified by both sides' parliaments and, complicating things further, it has recently received push back from Ireland regarding the clearing of Amazon rainforest for farmland.
Beef production throughout Brazil continues to increase, with investments leading to improved production efficiency, disease management, and supply chain traceability.
Since the beginning of the millennium, Brazil has increased its beef production by 55 per cent.
Much of these production gains can be attributed to the increase in the size of their national herd, growing by almost 17 million head over the course of 20 years.
The current economic situation in Argentina is delicate and fragile, with ongoing uncertainty regarding elections.
The low value of the Peso will continue to make Argentina an attractive supply source for China, while higher levels of inflation will likely slow local beef consumption through 2019.
While Argentina has been granted access to the US, shipments there have been minimal due to the strong demand from China.
There is a growing dependence on China, which has accounted for 73 per cent of Argentine beef exports this year.
Uruguay has strongly positioned itself within the market for grass-fed beef, underpinned by strict sanitary standards and excellent transparency along their supply chain.
Uruguay is targeting the China market by increasing branding and marketing initiatives, in particular through the southern regions.
Current exports for the year-to-July sit at 195,000 tonnes with 68 per cent of this heading to China.
With access into a number of key markets, namely the US, China and the EU, Uruguay are a strategic competitor for Australia, but exports are limited by a relatively modest supply base.
2019 has been a challenging year for Paraguay, with flooding in March and May slowing sales, declining cattle prices and a fire at one of the largest meat packing plants reducing slaughter cattle demand.
Year-to-July exports sit at 130,000 tonnes with the majority of this beef heading to Russia and other destinations around South America.
A projected increase in beef production and slow domestic consumption should lead to a revival of beef exports next year.
Cattle slaughter picked up by 2 per cent in August, which possibly indicates improved slaughter numbers for the second half of the year.