THE red meat industry is only just starting to absorb the implications of last Thursday’s ten percent tariff imposition by the United States on all Australian imports.

However there’s been an immediate reaction in imported beef prices following Trump’s tariff wrecking ball.

The daily Urner Barry Yellow Sheet – a key US meat industry price monitor – on Saturday quoted imported 90CL frozen manufacturing beef up US15c/lb, while domestic fresh was unchanged.

That translates into A$12.20/kg cleared and delivered, up nearly ten percent (a noteworthy statistic, for obvious reasons) from $11.10 on prices seen just two days earlier. Those prices include CIF (FOB clearance costs, sea freight) and did carry some currency movement (see references below).

Some local traders say the latest Urner Barry price perhaps represents a little speculation/exploitation, including some unsold inventory that’s been sold-on to end-users looking to secure supply.

While the weekly figure is now a little dated, MLA’s most recent US imported 90CL cow beef indicator sat at a record high of A$10.93 CIF (US312c/kg) on 28 March.

Australia ‘least worst’ impact

While the 10pc tariff on Australian beef exports is unpalatable to all market players, all traders spoken to this morning pointed out that Australia is at the lowest level of impact.

“We are no worse off than any of our competitors servicing the US market, than we were a week ago,” one trader pointed out, “and we are better off than some.”

Export competitor Brazil now faces a 36.4pc US tariff, ‘stacking’ the new 10pc retaliatory tariff on top of the original out-of-quota tariff of 10pc. Traders say that huge burden is likely to be sufficient to force more Brazilian beef out of the US market, and into other customer countries like China.

There have been sweeping changes in global economies since Thursday’s tariff announcement, some of which have direct and indirect implications for imported beef trade:

• A massive selloff has occurred in the US stock market since Thursday, inevitably unsettling US citizens and potentially pressuring red meat buying patterns if it persists.
• The Aussie dollar sank like a stone on Friday, losing more than US3c, and was trading below US60c for periods this morning. That adds wind to the sails of Australian red meat exports, but makes it tougher for domestic market customers, who now (at current currency levels, at least) are less competitive on a given carton of cube rolls.
• A beef processor spoken to at a lunch on Friday warned about indirect tariff impacts on the Australian beef industry. “Take the hides market for example,” he said. “China takes the overwhelming majority of Australian cattle hides, for processing into leather. The biggest export market for those hides is the US, but China is now exposed to a 34pc tariff on all products entering the US. It’s impossible to see how that won’t affect the hides market for Australian processors.”

While Australian Prime Minister Albanese has announced there will be no Australian retaliatory tariffs against the US, other countries have already moved, or are still considering their responses.

China, among the worst affected US trading partners, has already imposed equivalent 34pc tariffs on US products (including beef), effective 10 April. The European Union has also promised retaliatory action.

US Meat Export Federation’s Dan Halstrom noted on Friday that new US tariffs have also created uncertainty for buyers of US red meat in other destinations where retaliation could impact market access and prices.

“USMEF is hopeful that instead of retaliating, other trading partners will choose to lower trade barriers for US exports,” he said. “This would certainly ease the concerns of importers and reduce volatility in the global markets.”

Trade reaction still has to play out

“Given that the tariff result only arrived on Thursday, there was only a day’s trade on Friday for the market to start to absorb the implications,” one of Australia’s largest meat trader told Beef Central this morning.

“There’s still a lot of mixed signals – it will only be later this week that a clear picture emerges,” he said.

“Tomorrow (when the US starts its working week), there’s going to be a lot of phone calls back and forward across the Pacific.”

“But given that the US now desperately needs imported beef, and the lower levels of production in Australia since the Cyclone and floods, as well as a series of short processing weeks ahead, it’s hard to see that there’s going to be a lot of meat out on the market.”

“Remember it’s still Sunday in the US this morning, so it won’t be until tomorrow that business starts to happen. But let’s be honest: at this stage its confusion – globally – in the meat trade, not just in the US.”

One senior Australian meat trader visited the US Meat Institute’s large retail-focussed Annual Meat Conference (AMC) in Orlando, held last week. Tariffs was a red-hot topic.

“Consistently, their feeling was that the US consumer is going to have to bear the cost, or most of it,” he said. “They conceded that they needed the meat, and Australia has options.”

While some ‘pure trading houses’ in the US might try to push some of the additional cost back on Australian exporters, the bigger food service operators (McDonald’s, Burger King etc) were not going to have the ability to push back too hard, given the current state of play in supply, the trader said.

“There’s a fundamental shortage of meat in North America, and that’s not going to improve for two or three years.”

US imports surge

US beef imports in January were a record 608 million pounds, more than 21pc higher than January last year, says the US Economic Reporting Service. The main contributor to the large year-over-year increase was imports from Brazil, up 42m lb from a year ago. Also contributing to the increase were imports from Australia and the rest of world (countries not in the top five suppliers), specifically Paraguay, which was up 28m lbs. Paraguay became eligible to export fresh beef to the US in 2023 and imports began climbing throughout 2024, says ERS.

Based on the strong imports in January and continued demand for lean processing beef, the forecast for first quarter US beef imports was raised 100m lb to 1.33 billion lb, says ERS. Its second quarter forecast is raised 30m lbs to 1.1 billion lb, with the annual total likely to be 4.875 billion lb. If realised, this would be a 5pc increase year over year, says ERS.

• The Trump tariff situation will be a red hot topic at the Australian Meat Industry Council’s Meat Processing & Export Conference starting this afternoon. Beef Central’s Jon Condon, who has covered every AMIC, AMC and AMEFC Export conference since 1991, will be in the thick of the action.
• Other Trump tariff implications are discussed in today’s separate March monthly beef exports summary.