At the recent ARA Global Symposium in Melbourne, Global AgriTrends Global Meat Trader and Analyst, Simon Quilty, looked at shifts underway in global beef supply and the impact it has on everything downstream in the livestock supply chain. This is a transcript of his presentation
The livestock cycle is about to do something I have not seen before, and the consequences run well past the saleyard. Several of the world’s major cattle producing countries are rebuilding at the same time, Australia is entering its own rebuild, and the sheep flock has already passed its tipping point. For anyone whose raw material is an animal, the next three years are the tight part of the cycle.
When I speak with renderers and exporters, the concerns are very clear: geopolitics, tariffs, safeguards, livestock rebuilding, trade access and weather. All of them ultimately feed back into supply.
There simply is not enough beef globally. US cattle inventory is at a 74-year low, and there is still no strong signal that the rebuild has properly begun.
Australia is moving down the path of rebuild. As supply tightens, processors have to work harder to maintain throughput, and livestock prices respond.
We are about to start paying the piper on cattle supply. Yardings are falling, and those yarding figures flow through into slaughter within six to eight weeks.
My expectation is that Australian yardings fall around 14 per cent this year and another 24 per cent next year. You can apply a similar pattern to slaughter. Supply is going to be tight.
Globally, several major cattle-producing countries are rebuilding or are about to rebuild at the same time. I have never seen that synchronisation before.
For the next three years, we expect global beef supply to be down around 15 per cent. That creates strong demand for the available high-quality product.
On sheep, I believe we have reached the tipping point. Mutton supply will be tight as producers retain females and rebuild the flock.
The Australian sheep flock will structurally be smaller than it was in the past. Producers who have exited wool are not simply going to come back.
For renderers, the livestock cycle matters directly. Less slaughter means less blood meal, less meat and bone meal and less tallow available to the market.
Global sheepmeat supply is likely to tighten further in 2027. Sheep blood meal, meat and bone meal and tallow supply will tighten with it.
Global beef supply is also likely to tighten in 2027 and remain tight through 2028 and 2029. Beef blood meal, meat and bone meal and tallow tighten as a result, both globally and within Australia.
The tighter the cattle supply, the higher meat and bone meal prices tend to go. When cattle numbers recover, you see the reverse. That relationship is very clear.
Tallow is heavily exposed to higher energy prices. During one period in March, oil was up 52 per cent and tallow was up 44 per cent. There is a strong relationship between the two.
Tallow prices will continue to be influenced by energy prices, with renewable fuels and sustainable aviation fuel becoming important demand drivers.
Our exporters have found a way. They have turned chilled product into frozen, used ports they would not normally use and adapted shipping patterns. The key is that we found a way.
Every market is different. In Australia, chicken is replacing beef largely because of price. In the United States, the preference for beef remains very strong.
The next few years are the tight part of the cycle. As we move towards 2030 and beyond, global livestock numbers begin to recover and the supply picture changes again.
Simon Quilty is a global meat trader and analyst with Global AgriTrends.
