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Tighter global beef supply expected to support Australia's export outlook

Rabobank

Australia’s beef sector is expected to remain a standout performer amongst global competitors in 2026, with a new industry report finding the country is well placed to benefit from tightening global supply, firm international demand and only limited near-term disruption from recent trade policy changes.

 

In its Global Beef Quarterly Q2 2026 report, agribusiness banking specialist Rabobank’s RaboResearch division says global beef production is expected to fall by 2.2 per cent this year, with major contractions forecast in Brazil, the United States and China, while cattle prices across most major producing regions had risen through the first quarter of 2026.

 

Against that backdrop, the report said, Australia is expected to continue delivering historically-high beef production and export volumes, reinforcing its role as a key supplier into undersupplied global markets.

 

RaboResearch senior animal proteins analyst Angus Gidley-Baird said the combination of tighter global availability and Australia’s ability to keep product flowing is creating a supportive environment for the local beef sector, particularly for exporters targeting high-value international markets.

 

Global production declines

 

The report says global beef production in quarter one was down 2.5 per cent year-on-year, with full-year output expected to remain lower as supply constraints intensify in several of the world’s largest beef-producing nations.

 

RaboResearch expects some of the biggest reductions in Brazil, where annual beef production is forecast to fall four per cent, the US (a forecast decline of three per cent) and China (two per cent).

 

Mr Gidley-Baird said this broader contraction mattered for Australia because it was occurring at a time when many import markets were either short of domestic supply or looking to diversify sourcing.

 

“When you have global production moving lower across several major regions at the same time, it tends to underpin trade opportunities for reliable exporters, and Australia is one of those exporters,” he said.

 

“Importing markets are watching availability and price very closely, and Australia is well placed to capture demand where supply from competitors becomes tighter or less consistent.”

 

Trade changes

 

The report says several major trade developments have been announced in recent months, including the provisional implementation of the EU-Mercosur (Argentina, Bolivia, Brazil, Paraguay, Uruguay and Venezuela) agreement, a new Australia-EU trade outcome and the renewal of export licences for more than 400 US beef plants into China.

 

However, RaboResearch says, the short-term impact of those changes is likely to be more modest than “headlines suggest”.

 

The report notes that while the EU-Mercosur deal improves the tariff position for South American exporters into Europe, Mercosur suppliers were already shipping large volumes into the EU under previous arrangements. Likewise, while Australia’s newly- concluded trade arrangement with the EU includes the elimination of the 20 per cent tariff applied under the existing (Hilton) quota and establishes a new quota, the benefits for Australian exporters are expected to build only gradually because of a 10-year phase-in period.

 

Mr Gidley-Baird said while these developments were strategically important, they were not likely to trigger an immediate reshaping of trade flows.

 

“For Australia, the agreement with the EU is positive and should improve long-term access, but the phased implementation means it is not an overnight step-change for exporters,” he said.

 

RaboResearch says that although China renewed export licences for a large number of US beef plants, any meaningful lift in US shipments to China in 2026 is expected to be constrained by low US beef availability and high US beef prices.

 

Chinese quotas

 

Australian beef export volumes to China were up 31 per cent for the first five months of the year, as exporters take advantage of the market before Australia reaches its quota threshold.

 

“Australia reached 90 per cent of the quota on June 2, with the likelihood that the full quota will be reached in coming weeks,” Mr Gidley-Baird said. “China is one of our largest markets – taking approximately 20 per cent of our export volumes in 2026 – and, with that volume, we expect there will be some disruption as exporters pivot to other markets. But at this stage, market signals – ongoing strong prices and high slaughter volumes – indicate a confidence in the market that any disruptions caused by reaching the threshold will be minor.”

  

Cattle prices

 

The report says global cattle prices in the first quarter of 2026 were generally higher than in the previous quarter, with most major producing countries recording increases of between two per cent and nine per cent. Brazil posted the strongest rise at nine per cent, while cattle prices in Uruguay, the US and Europe also moved higher.

 

April price movements showed some moderation in Australia and New Zealand, while US and Canadian prices continued to rise.

 

Mr Gidley-Baird said this mixed pricing picture still left Australia in a competitive export position.

 

“Price movements are reflecting the different supply cycles at work around the world, but overall the market remains supported by tight global fundamentals,” he said.

 

Middle East conflict

 

The Middle East conflict is increasing cost pressures across Australia’s beef supply chain, with flow‑on impacts for producers and consumers, the report said.

 

“Higher oil prices are increasing the cost of fuel, fertiliser and other key inputs, particularly affecting regions like Australia that are exposed to Middle Eastern energy markets,” Mr Gidley-Baird said. “These pressures are expected to push up livestock feed and production costs locally.”

 

The more significant risk for Australia lies in how the conflict in the Middle East impacts global economic conditions and, in turn, consumer demand for beef, he said.

 

“The bigger issue is that slower growth, higher inflation and tighter household budgets globally are likely to weigh on beef consumption.”

 

RaboResearch said weakening consumer demand – particularly in import markets across Asia – could create downside risk for Australian export returns, as beef demand is closely linked to household income.

 

At the same time, Mr Gidley-Baird said, consumers are expected to shift spending behaviour, favouring retail channels and lower‑priced cuts over premium products.

 

“In a high-cost environment, consumers focus on value – which means trading down to cheaper cuts or alternative proteins,” he said.

 

“In a market where beef prices are already elevated, any softening in demand could place margin pressure across the supply chain, limiting the ability to pass on further cost increases.”

 

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