from ABC Rural

The United States has overtaken Japan as Australia’s single largest beef export market.

With the US cattle herd at a 60 year low, hamburger chains are seeking alternatives, and Australia has filled the gap.

Called ’90 cl beef’, or manufacturing beef, the high volume low price beef is in hot demand, and Australian exports of it to the US have increased by 34 per cent on last year.

Australia’s cattle numbers are heading towards their lowest in 20 years.

Prolonged drought in Queensland and parts of New South Wales, combined with record exports of meat and live cattle will result in a cattle herd of 26.1 million by June 2015, down even further from the current 26.7 million.

Cattle prices are tipped to rise by 40 per cent, as tight supply meets continued record export demand. The only question is, when?

In a mid year update, Meat and Livestock Australia chief economist, Tim McRae says "the limiting factor in a price turnaround for the Australian market will be seasonal conditions for the remainder of 2014 and the northern 2014-15 wet season – which will be key to watch."

Live exports are tipped to exceed 1.1 million head this year, which will be the highest number in 10 years.

Beef and veal exports are forecast to match 2013’s record levels at 1.1 million tonnes.

MLA’s mid-year update includes the following export forecasts:

· South Korea are tipped to fall 14 per cent during 2015, due to Australia’s tightening supply and higher prices.

· Japan are expected to fall 7 per cent to 250,000 tonnes in 2015 for the same reasons

· United States tipped to drop slightly from the current high levels. In 2015 exports are forecast to fall 2 per cent to 280,000 swt.

· China is expected to take 140,000 tonnes this year, a decline of 10 per cent on 2013. It’s forecast to slip a further 7 per cent in 2015.

· Russia has suspended imports from Australia. It took 30,000* tonnes last year and is only taking 5000 t this year. MLA doesn’t expect to see a recovery in that trade soon, and there are alternative markets. (*Amended figure, not 80,000 tonnes in 2013.)

Cattle Council president Andrew Ogilvie says beef prices need to rise for Australian cattle producers.

"It’s a concern that the world wide demand for beef is quite high, and we’re selling record amounts, but we’re not seeing too much of that value flow back behind the farm gate," Mr Ogilvie said.

"I would hope in the future we see better returns for producers."

Mr Ogilvie says he’s confident prices will rise.

"When it rains, the price of store cattle will rise…. and we just hope that retailers and processors rapidly reflect that rise with returns to producers who are finishing stocks."