THE saying used to be, “When the US sneezes, Australia catches a cold”, and this has been true for the Australian beef industry for the past five decades as it became increasingly exposed to the global beef market.
By virtue of its size and prominence as both a major exporter and importer, small changes in US beef production can have large consequences for Australian exporters.
Across the span of its cattle cycle, the US can move from being Australia’s largest competitor to being our largest customer.
Currently, the Australian beef industry is benefitting from dramatically lower US beef production after its herd was liquidated due to a severe and prolonged drought in major US beef producing regions.
But while many are focussing on the decline in US beef production, our attention is shifting southward to the rapid emergence of a major low-cost competitor.
This week we take a deep dive into the Brazilian beef industry; its rising production, what’s driving it and in which markets Australia can expect to feel the presence of Brazilian beef.
Brazilian production to determine the direction of global beef prices in 2026
The outlook for global beef prices in the medium term could hinge on the level of Brazilian beef production.
After rising 0.4pc in 2025, the USDA expects output in the world’s six biggest beef producers to fall by a combined 2.4pc in 2026 – the biggest annual drop in decades.
As part of this the USDA is estimating that Brazilian production will fall 5.3pc to 11.7 million tonnes carcase weight equivalent this year.
Source: USDA & private analyst estimates
However, USDA’s estimates diverge markedly from some private analysts that suggest Brazilian beef output could rise (due to productivity gains) again this year, to around 12.6mt in 2026, reducing the decline in production across the top six producers to just 0.2pc.
The divergence in estimates is significant, equating to almost 50pc of Australia’s annual beef export volume.
The Brazilian beef industry has a habit of confounding forecasters.
In 2025 the consensus was that Brazilian beef production would decline by 5pc – when it in fact rose by 4pc. The difference in actual production vs forecasts across an industry the size of is not insignificant, it equates to about the size of Australia’s total annual beef production.
My South American contacts are not suggesting that Brazilian beef production is going to take a step backwards in 2026.
Here is some comment from a market participant in Brazil:
“We are not seeing any production cuts in Brazil – it is quite the opposite. Margins are a bit better compared to the last cycles, and even though there are quotas under discussion, none of the producers are taking that into consideration and local prices are still beneficial for cattle. The Mercosur-EU trade deal recently signed has put a bit more of confidence into the system.”
Source: USDA & private analyst estimates
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