The divergence is largely being attributed to differences in consumer demand across the globe, and it's expected the effects will flow through to exports.
Rabobank's recently-released quarterly global beef report suggests declining supply and strong consumer demand in the United States is driving cattle prices higher, while lower domestic beef supply has also held up prices in Canada and Europe.
In most other regions, however, the opposite – increased supply and lower demand – is making prices softer.
Rabobank senior animal proteins analyst Angus Gidley-Baird said US cattle prices have increased almost 30% over the past 12 months, while Australian cattle prices have dropped by more than 30%.
“This price spread is the largest we have seen in the past 10 years,” he said.
“Such a separation in prices will have consequences for beef exporters’ competitiveness, and we expect to see some shift in trade volumes as a result.”
A consistent theme across most markets – other than the US – is softer consumer demand and full supply chains.
In a number of regions, particularly in Asian countries, beef purchases made through 2022 and into 2023 in anticipation of recovery from Covid have not been consumed, the report says.
These are now part of growing stock levels that also include other proteins.
“Softer consumer demand is making it harder to move these volumes through the system,” Mr Gidley-Baird said.
Australia
After falling for most of the year, Australian cattle prices had levelled out in mid-June, the report said.
Mr Gidley-Baird said the market had “seen heavy steer prices rise towards the end of July, before dropping again".
"Meanwhile, national saleyard restocker steers have drifted down slightly in August. The EYCI was down 45% year-on-year for the month of August to average AU$5.40/kg."
Through May and June, prices had eased on producer concern about the seasonal outlook, which added additional cattle to the market, Mr Gidley-Baird said.
“At the same time, producer buying activity dropped as cattle numbers were building, processing capacity remains constrained and consumer markets are still soft.
"This saw prices fall to their lowest levels in five years through July. But with some rain through
cattle-producing areas in July, stability returned to the market."
Weekly national slaughter volumes for year to date (as week 33) were up 23% on 2022 volumes, with the increased cattle inventory flowing through to finished cattle numbers.
“Processors remain constrained as they balance the decision to increase shifts with available cattle numbers and demand in end markets.
"As such, weekly cattle slaughter has been range bound at around 120,000 per week.
"Our expectations are that when supply chains start to clear and product starts to move more freely, given the additional cattle numbers on the ground, we will see processing capacity lift and Australian production take another step up."
Australian export volumes rise
For Australia, the Q3 2023 Beef Quarterly says, export data for July shows beef export volumes up 30% year on year.
However, Mr Gidley-Baird said markets are mixed, with congestion generally limiting volumes to Asian markets, such as Japan, while strong demand in the US and an increase in Australian cow slaughter is seeing stronger volumes exported to the US – up 103% for July.
“Australian live cattle exports are down 17% for the year to date (July), but we see this more as a reflection of lower Australian cattle numbers in northern Australia where the rebuild has been slower,” he said.
High livestock numbers
Mr Gidley-Baird notes Q2 Australian cattle slaughter numbers were up 16% year on year, while 1H slaughter numbers were also up 16% compared with the first half of 2022 year.
“While not record levels, you can see that they are approaching the five-year average and given constraints on processing capacity at the moment, these volumes will be testing throughput,” he said.