Growth in Australian output while retaliatory tariffs bite the US

It has been another turbulent week for global agrifood trade. China has followed through on imposing tariffs on agricultural imports from the US in retaliation for the US imposing tariffs on a range of Chinese goods being imported to the US.

These include a 15% tariff on US chicken, wheat, corn and cotton, and a 10% tariff on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products. All of these tariffs came into effect on Monday of this week.

Dependence on US

So far Australia has managed to avoid falling foul of the US President’s crusade on imposing tariffs with major trading partners. The US is Australia’s main export market for beef and lamb and the most recent export data is described by Meat and Livestock Australia as “soaring to new heights” for the first two months of 2025.

Total beef exports for February were 117,502 tonnes which is 25% higher than February last year. It is also 11% above the previous record beef export volume for February which was set in 2015.

Increased dependence on the US market is the reason Australian beef producers will be anxiously hoping that Australia avoids a tariff war with President Trump.

Beef volumes to the US last month were 35,092 tonnes, a 64% increase on February 2024 and almost four times more than the 9,025 tonnes exported in February 2022.

This was when the overall Australian beef exports were low because of herd rebuilding following a prolonged drought in previous years. It is a similar trend for Australian lamb exports as 8,657 tonnes were exported to the US in February, a 15% increase on the same month last year.

Outlook

The buoyant export market is expected by Meat and Livestock Australia to lead to record cattle production and beef exports in 2025. This record was achieved despite cattle numbers processed being 7% lower than when the previous record was set in 2014 as higher carcase weights offset fewer numbers.

As a result of this expansion, a 1.4% reduction in the Australian cattle herd to 30.1m is expected as more cows go to slaughter in response to export demand and dry conditions in South Australia.

With lamb, a slight decline of 0.5% is forecast for lamb slaughter in 2025 to 26.2m but this will still be the second highest year on record after 2024.

Meanwhile in the US

The US Meat Exporters Federation (USMEF) reported that in January 2025, US beef exports were up 3% on January last year to 102,840 tonnes.

China contributed significantly to this increase, with volumes to that market up 35% compared with January 2024 to 15,920 tonnes. As well as the 10% tariff increase on beef, which came into effect this week, bringing the total tariff to 22%, concern is growing about exporter registrations.

USMEF reports that “registrations for most exporting establishments are set to expire 16 March. US officials are working to resolve the issue but if these plants are no longer eligible after mid-March, this will largely unravel the market access gains achieved under the US.”

Australian beef and lamb exports are expected to grow further in 2025, greatly facilitated by sustained growth in demand from the US. The US is the only country in the world that both exports and imports in excess of 1m tonnes of beef each year. They now face an almost doubling of the import tariff by China to 22%.

On top of this is the challenge of getting renewal of export approval of US factories to supply China, their fourth largest export market in 2024. In the finely balanced world of global trade, one or two disruptions can have a powerful knock-on effect.

Irish farmers and exporters will be watching how Australian lamb exports to the UK increased by 52% to 2,458 tonnes in the first two months of 2025 and beef almost doubled to a still low 1,214 tonnes.

This market has real potential for further growth if there is any disruption in Australian-US-China trade.