At the beginning of this year, Australian beef production and exports were expected to drop well below 2014 levels as the industry began to rebuild its breeding herd after more than two years of drought-induced liquidation. But these reductions did not materialize in the first half of the year, as disappointing rainfall kept Australia’s slaughter levels on a record pace. As a result, exports continued to soar, further buoyed by a weakening Australian dollar.

A slowdown finally began to surface in July, though exports were still steady with last year’s large volume at 121,568 metric tons (mt). In August, Australia’s exports dipped below year-ago levels for only the second time since 2013, with volume slowing 5 percent from a year ago to 106,010 mt.   

U.S. Meat Export Federation (USMEF) Economist Erin Borror explains that this will tighten Australia’s available supplies and help improve the competitive position of U.S. beef in key Asian markets, especially South Korea and Taiwan. In Japan, Australian beef faces lower import duties than U.S. beef, due to an economic partnership agreement enacted earlier this year. But the shift in supplies and prices could still provide some renewed momentum for U.S. exports to Japan. U.S. beef still lacks access to China, where Australia is the largest supplier.