Australia’s processor cow indicator has reached a record high price as the United States ramps up imports of lean beef.

Meat and Livestock Australia’s (MLA) national processor cow indicator has gone beyond 390 cents a kilogram for the first time and is up nearly 100 cents a kilogram on this time last year (an increase of 32 per cent).

National Processor Cow Indicator graph showing a green line that goes up towards the right.

The national processor cow indicator has reached a record high. (Supplied: Meat and Livestock Australia)

MLA’s global supply analyst Tim Jackson said the cow market was running hot because the world was facing tight supplies of lean beef.

“Around the world a lot of countries are short in terms of production of lean beef,” he said.

“American cow slaughter has been falling for quite some time and in the first half of this year was down 10 per cent year on year.”

At the Wodonga saleyards on Tuesday, bidding for heavy cows was “keenly contested” and reached up to $4.60 a kilogram.

Meanwhile the “highlight” of the sale at Eucha this week were heavy cows reaching $4.74 a kilogram.

US demand escalating

In its latest market report, the US-based Steiner Consulting Group said tight supply was creating “ever escalating prices for lean beef”, with the US relying increasingly on imports from Australia.

This is despite Donald Trump’s 10 per cent tariff.

It said the US Department of Agriculture (USDA) was forecasting beef imports to reach 5.36 billion pounds (2.43 billion kilograms) in 2025, which was 15.7 per cent higher than last year.

“If this forecast proves correct, it would imply that beef imports in 2025 will outpace US beef exports by around 2.7 billion pounds [1.2 billion kilograms],” it said.

Between January and July the United States imported 1.5 billion kilograms of beef with Brazil the largest supplier, followed by Australia.

But US President Donald Trump has since enforced a 50 per cent tariff on Brazilian imports bringing that beef trade almost to a halt.

CME feeder cattle index graph showing a green line going up on the right.

The benchmark CME Feeder Cattle Index has hit a record high. (ABC Landline)

US cattle prices at ‘crazy’ levels

Wade Christensen from Kimball Livestock Exchange in South Dakota said black feeder steers sold this month for a record 375 cents a pound, fetching $A5,309 each ($US3,513). 

ABC Landline estimates similar cattle would have sold at Roma in Queensland last week for over $2,200.

Price comparison of feeder steer prices in Australia versus United States.

Australian cattle prices are on the rise, but still way below the US. (ABC Landline)

Mr Christensen said after years of drought the US cattle herd was at its lowest level since the 1950s and he felt the nation’s herd rebuild had not started in earnest and would not happen quickly.

“Everybody is really confident [in the US cattle industry], but it’s also scary times the amount of money we’re dealing with to try and buy back [and rebuild herds],” he said.

“When you’ve got young calves off the cow costing $US2,500 a head and the current interest rate, you’ve got a lot of risk.”

Mr Christensen said cattle prices in the US were at “crazy” levels.

“[We’ve got a] super short supply of cattle,” he told ABC Landline.

“It’s hard to believe the demand for beef, people just want more of it and are willing to pay whatever it takes.”

A report by CoBank in the United States backs up the sentiment by Mr Christensen, showing demand for US beef is soaring despite the rising price.

“US beef is attracting more customers than it can handle,” report author Brett Earnest wrote. 

“Even at record prices, demand has not softened — it has actually edged upward.”

Watch ABC TV’s Landline at 12:30pm on Sunday or on ABC iview.