Drought in Australia, the world’s third-biggest beef exporting country is forcing ranchers to cull cows as the U.S. herd is at its lowest point in 60 years sparking concerns for long-term global beef supply. In the short-term global supply will increase because of the cull, however in 12-18 months the next generation of cattle will not be there for the market. For the week ending January 24, cattle slaughter in Australia increased 40% year on year to a record 161,712 head and Meat & Livestock Australia predicts that the Australian cattle herd will drop to 27.25 million head by July, or lower if drought persists. A combination of freezing temperatures across the U.S. and drought in Australia and California have pushed prices to record highs and analysts predict Australian cattle prices could climb by up to 50% in 2014. This shift could cause global demand for pork and chicken to see increases. China’s beef imports quadrupled in 2013 to 400,000 tons and Rabobank has stated that it is likely that China will re-open its market to U.S. and Brazilian beef in order to broaden is available suppliers in the face of tight supply and rising prices.
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