Taste for burgers in the US underpins boom in Aussie beef exports

As the US herd shifts into rebuild, the demand - and price - for lean frozen imported trimmings is shooting up and Australia is clearly the go-to supplier.

The latest Department of Agriculture monthly beef export figures show shipments of Australian beef to all markets increased 14 per cent in March over February.

Beef export volumes are now running 25pc higher than during the first quarter of 2023 and 22pc higher than the five-year average for the first quarter, Episode 3 analysts report.

This is the highest level that quarter one beef exports have been since 2015.

The US has so far taken 68,095 tonnes shipping weight for 2024, a massive 79pc higher than the first quarter flows seen in 2023 and 66pc above the five-year average, Episode 3 said.

The US is now at its smallest beef cow inventory in 50 years, and that lack of supply is coinciding with historically strong demand for beef burgers which traditionally goes hand-in-hand with cost of living pressures.

Analysts and industry leaders in Australia have for some time being pointing to massive potential for beef exports on the back of this phenomena.

The latest Australian beef export data has sparked some analysts to predict 2024 total beef exports will be in the top four biggest years on record.

It has also pumped plenty of optimism into the cattle market, with agents say there is plenty of talk around the rails of the US potential providing ongoing solid demand for the higher volumes of cattle Australia is expected to have this year.

StoneX analyst Ripley Atkinson said it was evident markets were increasingly looking to Australia for beef.

"Based on current pricing relative to our global competitors, we're an attractive proposition for markets to buy from, especially if you add in a low Australian dollar," he said.

"Despite well-documented challenges from exporters relating to trading conditions and difficulties in moving product, March volumes showed the demand is there for our beef."

Economic downturns may be occurring in many of Australia's major beef markets but demand has held up, especially for chilled product. This points to the high-end consumer being somewhat shielded from cost of living pressures or at least opting not to trade off premium beef at they examine their budgets.

"This is important because chilled exports drive value through the supply chain due to their premium nature and shorter shelf life," Mr Atkinson said.

Japan, which typically holds the crown of top customer for Australian beef, is also taking volumes at a 25pc higher rate than last year.

However, Episode 3's Matt Dalgleish points out 2023 was a pretty weak season for beef import demand in Japan due to high cold store supply.

China sits in third place, also a strong sign given the number of exporters still locked out of this market on technical trade issues. Quarterly beef export volumes from Australia to China are still travelling 5pc above the average seasonal trend.

Analysts also say the growth in emerging markets this year is just as important a trend for providing optimism in the cattle market.

Exports to the Phillipines were up 61pc in March year-on-year, to Thailand up 27pc, to Saudi Arabia up 52pc and to Vietnam up 12pc.

"This demonstrates Australia's unique market diversity, assisting us in managing risk and ensuring we are not being overly focussed on one country like the South Americans are," Mr Atkinson said.