![Australian cattle prices look positive for the years ahead, according to Rabobank food and agribusiness senior analyst Angus Gidley-Baird. Picture by Barry Murphy Australian cattle prices look positive for the years ahead, according to Rabobank food and agribusiness senior analyst Angus Gidley-Baird. Picture by Barry Murphy](/images/transform/v1/crop/frm/229623862/1c49a652-698a-4624-8841-084630a484ab.jpg/r0_29_3061_1821_w1200_h678_fmax.jpg)
Australian beef farmers should prepare for a prolonged cattle price uplift, according to Rabobank food and agribusiness senior analyst Angus Gidley-Baird.
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Speaking at Agriculture Victoria's Better Beef conference in Ballarat on Thursday, Mr Gidley-Baird said this price increase will be driven by a slow rebuild of the US cattle herd over the coming years.
He suggested beef prices for 2024 would increase about 15 per cent on where they were in 2023 and that another 10pc could be expected in 2025.
"Everything is in favour of price upside," he said.
Crunching global beef demand and cattle slaughter numbers, he said Australian beef producers were well placed to capitalise, with the current national herd stable.
Mr Gidley-Baird explained how the US beef cow herd was at a near all-time low but a rebuild was on the horizon.
"The last couple of years, they've been going through quite severe drought and we've seen massive liquidation in the US beef cow herd," he said.
The US beef cow herd was at about 35 million in the 1990s and now sat at 28m.
However, this was set to change as record beef retail and cattle prices lured producers to increase their numbers.
"The next trigger that's going to push all those prices higher is when that US beef producer gets the confidence to go out and start buying cattle and restocking their property," he said.
"That's going to bring up cattle prices and force that through the [global] system."
However, Mr Gidley-Baird said this rebuild would not be like that which occurred following a similar US herd decline in 2014 but instead would occur more slowly.
Back then, US producers moved dramatically to rebuild cow numbers, cattle prices drove upwards, and a 60pc price increase was seen in as little as six months.
He said this latest rebuild would instead be more "prolonged" and that it would provide support in global beef markets for up to five years.
"The aggressiveness of this increase is not going to be the same as it was in 2014/15 but it's still a notable rise," he said.
"The end message at the end of the day is that the US cattle market will recover, that will provide support to the global prices and it will flow back to the Australian market."
![Rabobank food and agribusiness senior analyst Angus Gidley-Baird speaking at the Better Beef conference, Ballarat, this week. Picture by Barry Murphy Rabobank food and agribusiness senior analyst Angus Gidley-Baird speaking at the Better Beef conference, Ballarat, this week. Picture by Barry Murphy](/images/transform/v1/crop/frm/229623862/3ea2b522-85db-4dc7-8ce7-a914e484a5d0.JPG/r0_207_3872_2384_w1200_h678_fmax.jpg)
Mr Gidley-Baird said US producers were facing uncertainty around continued dry conditions.
"That US producer is looking at his decision on whether or not he should hold onto his heifers this year or go and buy more cows, he's saying whatever pasture I've got is probably about it," he said.
"There's also the costs involved in that rebuild process.
"Compared to 2014, we've got costs involved which are much higher, whether they be fertiliser and feed or interest and finance costs."
He also pointed out that the average US beef cow herd had 40 head, with 95pc of producers having less than 200 head.
He said these farmers had off-farm income and were grappling with higher living costs.
"Even with the opportunity to rebuild their herd, with very high cattle prices that are going to require them to borrow, maybe their incentive to rebuild at an aggressive pace isn't there like it was before," he said.
Mr Gidley-Baird also pointed to the number of heifers in feedlots in the US currently.
When the herd started to recover in 2014/15, 34pc of stock on feedlots were heifers. This sat at 40pc currently.
"It gives us an indication that that US producer is not really feeling like rebuilding their herd at the moment," he said.
"We think it's going to take a lot longer."
The key to capitalising on any beef price increase driven by the US cow herd rebuild was for Australian exporters to gain ground in Asian markets.
Mr Gidley-Baird warned that due to high levels of beef in storage and low consumer spending, markets such as China, South Korea and Japan weren't "firing" as well as they could.
He said these markets took primal cuts of Australian beef, while the US was hungry for lower-value trimmings.
He said Australian processors had to find a home for the full carcass and that this continued to prove challenging.
"We've got strong production volumes so what we probably need is just some support from those Asian markets - Japan, South Korea and China - just to make sure that their supply chains are current and consumers are willing to at least be comfortable paying for that product," he said.
"That's probably been the thing that's been holding us back at the moment in terms of that flow through of global beef prices to the Australian market.'
However, he said this was starting to change.
Export volumes to Japan had lifted so far in 2024, an indication that the market had burnt through its beef stores, and China was moving in that direction.
Mr Gidley-Baird insisted that the Australian herd was ready and able to accommodate increased demand.
"We're fortunate at the moment that we've got large numbers of cattle in the system so our production numbers are good and healthy," he said.
On these numbers, he said the national herd was stable.
"With the Australian cattle industry, we've got to the point largely where the rebuild has occurred," he said.
"We've now got enough cattle in the system, that there isn't an aggressive producer looking to restock and compete for cattle prices at the yards.
"At the same time, we're not in a situation from a seasonal point of view where we're seeing a whole lot of liquidation in the market.
"We're in a balance at the moment and it probably does feel that we're sort of just floating there, waiting for the next thing to have an influence on that market."
He said that next thing was US driven global beef price increase.