RECORD beef prices in the United States are creating "real opportunities" for the Australian cattle sector, according to Rabobank New York food market analyst Bill Cordingley.
As Rabobank Food & Agribusiness Research head of Americas, he was in SA recently as part of the bank's Visiting Experts Program.
He said the US - with 330 million consumers - was a significant consumer of Australian beef and a competitor in many of Australia's key markets.
For the first time in many years the US - the world's largest beef producer - was set to become a net beef importer because it had its smallest cow herd in 60 years and very tight protein supplies.
This was assisting Australia's push into emerging export markets and ability to market huge volumes of beef.
"This year will be the year of the cow in the US, with the cow sacred this year. We have seen a significant drop in cow slaughter and subsequent contraction in beef supply," he said.
It was not just beef which was at record price levels in the US, because of volatility in the supply of all proteins.
US pork supply was likely to drop by as much as 4 per cent to 5pc on the previous year with Porcine Epidemic Diarrhea Virus going through 70pc of the US pig herd, wiping out a whole generation of piglets.
"We have record hog future prices, record wholesale pork prices, retail record feeder and fed-cattle prices, and record beef wholesale prices," he said.
"No-one saw this happening and the consumer is not doing that badly with the economy growing 2-3pc. They want the product and are having to pay more for it."
The US appetite for burgers, lower cost and convenience had led to a shift from a eating steak to a "ground beef" nation.
Meatballs, sausages and burgers now accounted for about 60pc of total beef consumption and consumers were willing to pay for them.
"Ten years ago steak was 2.5 times the ground beef price - now it is less than 1.7 times. "This means all beef is going up but ground beef is going up faster," he said.
This augured well for Australia's lean beef exports.
He said that in the global protein market, red meat was becoming marginalised with beef production hardly expanding in the past decade and US per capita consumption dropping.
There had been direct substitution with cheaper white meats such as pork and poultry because of their more efficient feed conversion and integrated supply chain.
The US differential between beef and pork which 10 years ago was 33 cents a kilogram to 44c/kg is now $2.86/kg, and the premium for beef over chicken had blown out to $6.60/kg.
Mr Cordingley said this meant beef need to be marketed as a high-value product.
He also noted an erosion of trust between food brands and retailers and consumers in the US as consumers looked for greater transparency.
* Full report in Stock Journal, July 10, 2014 issue.