Cattle Australia director Bryce Camm, Rabobank senior Analyst, Animal Proteins, Angus Gidley-Baird and Coles’ National Livestock Manager for Red Meat Stephen Rennie.

RABO beef analyst Angus Gidley-Baird cut straight to the chase when asked by Cattle Australia director Bryce Camm at Cattle Connect to identify one major trend driving the cattle market right now.

Noting there were “so many things going on we could talk for hours”, he then pinpointed a single number for the large crowd to ponder: 7.7 million tonnes.

As he then explained, that was the volume of Brazilian beef production last year, which was their highest annual production on record.

“I think that is a really interesting number, not because that is what they did this year, but because what might unfold next year.”

Mr Gidley-Baird said there are expectations Brazilian production will contract next year.

“If it comes down 5 percent, is that going to be enough to create that competitive tension in the global market that is going to see us realise some of those record prices we have seen in the US market?,” he asked.

“Is the improvement in the Chinese market going to be enough with lower volumes out of Brazil to increase demand in that market?

“So to me that is an interesting thing to watch for the next 12 months.”

The conversation then moved straight onto the topical question of when the US may shift into full-scale herd rebuild mode and with it trigger a new round of global export demand opportunities for suppliers such as Australia.

“I think we might be in it, this might be it,” Mr Gidley-Baird responded.

“Looking from a US production point of view, their cow slaughter is down 17 percent compared to last year.

“So they have got to the point we were probably experiencing back in 2019/20 when we slaughtered so many cows we’re not willing to sell any more.

“So their cow slaughter has come down, they can’t sell anymore but their production is still pretty high.”

He added that the US were doing “amazing things” in terms of feeding cattle.

The average dressed carcase weight in the US had increased to around 440kg which compares to an Australian average of just over 300kg, he said.

“So they’re making up for lower numbers with increased weight.”

He said it also appeared the US had “reached the bottom” in terms of cow kills, which also meant they were at the bottom of their production of lean trim – which is the main product Australia’s beef industry sells to the US.

“So it might stay like that for a while because they’re going to go through the rebuild phase, it might take a couple of years, so their production of lean trim will remain low for a while, but I don’t think they’re necessarily going to see much more of a drop in that lean trim volume.”

The shortage of local product saw US domestic lean trim prices hit a record in 2024 of about US $3.80 a pound.

By contrast the price for Australian product in the market only made it as high as $2.90 a pound.

Why? Mr Gidley-Baird said the Rabo global research team had been having ongoing conversations to try to determine why the Australian price was not pulled up to the same level as the US prices.

The answer? In his view, it goes back to that huge volume of production coming out of Brazil.

“I think it was partly because of the Brazilan volumes in the market,” Mr Gidley-Baird said.

“Brazil has sent a record amount of beef to the US, even with the 27 percent tariff.

“You do a rough number on $2.90 and add 27pc tariff, you still come in under the $3.80 in the US.

“The Chinese and Asian markets have been weak as well so there hasn’t been that competitive tension to drive it up any higher.”

With the US herd liquidation and cow numbers now likely to be at the bottom, he said the question now turns to seasonal patterns and when that will allow rebuilding.

“That will cause another lift in cattle prices in the US because that shortage of cattle supply, restocker demand will push cattle prices up, that will probably lead to a lift in beef prices.

“But I think from our point of view in terms of that lean trim market, we’re probably at the point where those lean trim prices.. we are expecting them to go a little bit higher next year, but not a lot higher than what they did this year.”