SOUTHERN NSW and Victoria are emerging as a beef processing powerhouse region, sparking an insatiable hunger for cattle as the Australian herd moves into the rebuild phase.

Aided by large inflows of slaughter cows out of Queensland, Southern Australia’s record female kill ratio of 67.4 percent last year was the highest seen in 50 years, resulting in a decimation of the southern beef herd.

And most of those females are Angus with the breed comprising 73pc of the breeding herds across NSW, Victoria and South Australia, statistics suggest.

Simon Quilty. Image: Kim Woods

With a lack of Angus beef in the system, the price spread between flatback and Angus steers will widen, according to market analyst Simon Quilty from Global AgriTrends.

Mr Quilty was a keynote speaker at the recent Pasture Agronomy Service conference in Wagga Wagga.

He said the price spread between Angus and flatbacks in turn impacted on the 15pc increase in beef processing capacity in southern Australia.

“The irony is we’ve lost the most cattle in the south, yet it’s the region where the biggest processing capacity increase has been seen over the past three years –  and they have to keep those plants full otherwise workers will be lost,” Mr Quilty said.

“This has been a fundamental change in our processing systems, with the growth in capacity in southern Australia. Eventually we will see a growth in more feedlots along the Murray River as it doesn’t make sense transporting the animals from Queensland to Victoria.”

Global AgriTrends has forecast the national cattle kill to be 8.5 million head for 2026, before falling to 7.2 million head in 2027 as the southern herd rebuild gains momentum.

Compounding Australian supply has been the northern Australian floods and fires in the south with an estimated 105,000 cattle dead or missing.

Although the Middle East consumes a mere 3pc of the Australia’s export beef, 23pc of Australian grainfed tenderloins are airfreighted to the Persian Gulf states.

Mr Quilty believes Australian beef exporters will pivot in the short term, but the long term could prove challenging.

“We are now coming into a period where we will see tightening of beef supplies within six months and continued strong demand, even with the uncertainty in the Middle East,” Mr Quilty said.

He pointed to industry concerns around triggering the safeguard of the 2026 Chinese import quota of 205,000t by late April or early May, which may mean those cuts normally shipped to China, including shin, shank, brisket, topside, blade and chuck roll could be pivoted into Japan, Korea, Asia and North America.

“China is our number one buyer of grainfed loins, importing 8947t last year, and those expensive cuts such as tenderloin and striploin cannot be as easily pivoted.

“Canada now has access to the Chinese market with 40 processing plants approved to supply 172,000t of beef, but our estimates are more like 20,000t for this year. The expectation is for the US to achieve trade access to China in May of 164,000t and is estimated to ship 60,000t.

“This will equate to 80,000t from Canada and the US that will be potentially diverted into China, leaving a hole in Japan and Korea to fill.

“The only other country able to fill Japan and Korean markets with 80,000t is Australia, at elevated prices.”

With 55pc of Australia’s beef exports to China being grainfed, the grainfed industry has brought forward animals originally scheduled for 150-200 day programs to a reduced 120 days on feed, for an April/May shipment to avoid the tariff.

The market is now paying a premium of heavy feeder steers of 450kg liveweight, able to be turned off quickly to China.

Grain and grassfed slaughter-ready cattle are expected to remain in strong demand due to their ability to be shipped quickly and the need to meet increased slaughter capacity in southern Australia, Mr Quilty said.

Liveweight cattle prices remained strong, with southern feeder steers averaging 474c/kg, heavy steers at 454c/kg, heifers 425c/kg, and quality cows at 409c/kg.

He tipped feeder steers to rise to 528c/kg liveweight in June and reach 535c/kg in November followed by a peak of 650c/kg in June/July, 2027, then fall to 536c/kg by October 2027.

Current Angus feed steer prices of 510-515c/kg liveweight are forecast to reach 580c/kg by October/November and peak at 700c/kg in 2027. Heifers are expected to reach 482c/kg by November and then peak at 550c/kg in March/April 2027, falling to 473c/kg by spring 2027.

“Beef prices in Australia are yet to meet the real highs off the back of the US herd being at a 74-year low and continued falling beef production. This will mean greater needs for the US domestic market and less product exported globally,” Mr Quilty said.

“The expectation is another 20pc upside in cattle prices in America which flows through to high meat prices and better returns for Australia.”

He predicts slaughter cattle prices to peak in June/July 2027 as the Australian market tracks the key metric of the US Choice boxed-beef cut-out value.

“There will be a short term pull back on grainfed animals on feed, but in the long term with backfilling of US markets demand growth still remains on track.”