US beef industry in turmoil and Aussie beef is not going to get a look in

The US beef industry has lost at least US$13 billion ($20 billion) and is still in turmoil after outbreaks of coronavirus in meat plants across the country.

Analyst Steve Kay from US Cattle buyers weekly said it was the worst he has seen the trade in over 30 years, worse than the mad cow disease and E.coli outbreaks in the 1990s and early 2000s.

“When the processing plants closed right across the country after workers tested positive, the supply of meat to supermarkets ground to a halt for a number of weeks.

“Then ranchers and feedlotters could not send their cattle anywhere for processing. The plants were closed.

“And with an increase in supply, prices will fall, cutting profits at a time when the US economy will be in a deep recession.”

Mr Kay said it would take 18 months or more for the industry to get back on its feet, assuming no more coronavirus cases closed down the meat packing and processing plants.

“As a result, I cannot see any real appetite for Australian beef exports into the US in the short or medium term, except for low value hamburger mince.

Aussie beef off the US menu

With a backlog of homegrown cattle not being slaughtered in the US processing plants there are fears demand for overseas grown beef may slow.

The award-winning Stone Axe Pastoral company is looking across the Pacific with plans to sell in its high-end wagyu beef.

Managing director Scott Richardson said there was an opportunity into the US markets, in particular in the west coast markets of Los Angeles and Las Vegas.

“There is going to be bit of an oversupply of American meat when they do eventually open up their processing plants.”

Such a move normally would be logical as it also exports to China and so there is heightened interest in the US market with four Australian meat processing plants banned from sending their kills to China.

It is something that Mr Richardson is keeping a close eye on.

“We talk daily to our agent in China. We continually ask him what he thinks is going to happen.

“I don’t think anyone really knows where we are going to end up with this situation but all we can hope for is those involved are level headed and we get a resolution as soon as we can.”


Feature image credit – Beef carcasses in Australia that would normally be exported to the US or China(Kim Honan: ABC Rural)

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