With Australia and Brazil reaching the ceiling of China’s safeguarding quota, AHDB explores the potential solutions and impacts on the UK.
Introduction of the safeguarding quota
From the 1 January 2026, China introduced a country specific import quota for major beef suppliers, with a 55% tariff for any volumes above a set limit.
In 2026 Brazil was allocated 1.1 million tonnes, while Australia was allocated 205,000 tonnes.
As of 1 June 2026, China has reported that Australia have used up over 90% of this quota volume already. This has come as Australian processors have front loaded product into China, looking to maximise their use of the available quota. Imports for the first 5 months of the year were up 30% from the same period year-on-year. This has been possible as production in the first half of 2026 has been high, slaughtering close to capacity as well as carcase weights being up.
Reports suggest Brazil have filled 86% of their quota of beef into China. Chinese imports from Brazil in the first five months of 2026 were up 46% year-on-year. Q1 slaughter reached 10.19 million head, up 3.3% year-on-year– the highest since records began. Carcase weights were up 5.1% year-on-year, as more cattle were finished through feedlot systems.
Production for second half of 2026 into 2027
Australian beef production over the next 12 months will largely depend on how the developing El Niño unfolds, particularly its intensity. After two consecutive favourable wet seasons, soil moisture levels and groundwater remain strong, supporting pasture availability and cattle condition. However, if El Niño develops as strongly as forecast, it could trigger increased turnoff, leading to more beef looking for a home in the global market.
In contrast, Brazil’s production outlook for the second half of 2026 and into 2027 points to a modest pullback from the record highs seen in 2025. Forecasts suggest a 5-6% decrease in production. While export demand is expected to remain firm, domestic consumption is likely to soften as high beef prices encourage a shift towards cheaper proteins. The anticipated reduction in production is also tied to herd dynamics, with greater female retention signalling the early stages of herd rebuilding following a period of elevated slaughter.
Potential impact on global trade
With exports into China so high in the first half of 2026, frozen stores in China remain full. Therefore, demand from Brazil and Australia from now on will likely be high quality cuts.
For Australia, this increases the need to diversify into alternative markets.
With such a heavy reliance on China, accounting for just over 53% of Brazil’s beef exports, any shift in Chinese demand or market access creates significant pressure to diversify. This is particularly relevant with the EU set to impose restrictions from September (due to Brazil not reacting quickly enough to the antimicrobial and antibiotic usage problems), limiting another premium outlet for Brazilian beef. As a result, exporters will be focused on redirecting volumes into alternative markets. There are opportunities for trade diversification, particularly into markets such as Mexico, where domestic supply has been disrupted by ongoing screwworm concerns, tightening local production and increasing import demand.
Other emerging markets may also absorb additional supply, although typically at lower price points than China or the EU. Brazil may also lower prices to maintain competitiveness in China, even with tariffs of around 55%.
The US remains a key outlet for both Australia and Brazil. With domestic production constrained and herd rebuilding slow, largely due to prolonged drought, high input costs, and ongoing liquidation of the beef herd, US import demand has strengthened. Total US beef imports rose 14% in the first five months of 2026, with Brazil being their largest supplier followed by Australia. Brazilian shipments to the US rose 7%, maintaining its position as Brazil’s second-largest export market.
UK implications
Ireland is the biggest exporter of beef to the UK, followed by Brazil, Poland, New Zealand and then Australia. In 2025, Ireland exported 185,600 tonnes, Brazil 25,900 tonnes and Australia 15,000 tonnes.
UK imports of Australian beef rose 152% in the first third of the year, yet this market remains relatively small compared to Ireland and Brazil. In addition, limited producer willingness to meet UK specifications, due to insufficient premiums, will likely constrain further growth.
Brazilian imports of beef rose 61% in the first third of the year. This market is primarily processed corned beef, but some more frozen has been coming through, which is a watchpoint going forward.
As a part of the global market, the UK will feel the knock-on impact of shifts in global beef trade, but having an FTA does not immediately make it an attractive market. This impact is expected to remain limited with the global tightness of beef supply.
The strengthening demand from the US is helping to balance the global market. Looking ahead, US import demand is expected to remain firm as supply tightness persists. However, a key watchpoint will be consumer behaviour: as beef prices remain elevated, there is a risk that US consumers begin to trade down to cheaper proteins such as chicken or pork, which could cap further growth in import demand.
The result could cause downwards inflationary pressure on the Australian and Brazilian beef price, especially if they end up brining more forwards for slaughter because of a strong El Nino.
