China's escalating demand for beef is being met by Brazil —  the world's biggest beef exporter — but at least one analyst says Brazil has "overkilled" its national herd as a result, and the ramifications will be felt worldwide.

Meat analyst Brett Stuart from Global AgriTrends, has been following the amazing rise of Brazilian cattle prices this year.

"In less than two years, cattle prices have doubled in Brazil … they are now around 21 RI/kg which is around $A4.78/kg carcase weight."

He said a major reason for the price hike was surging demand from China, which was now the world's largest importer of beef.

Meatworks shutting down

Reports out of Brazil last month, estimated 45 per cent of the nation's abattoirs were sitting idle, citing weakening demand from a domestic population that was struggling with COVID-19, and falling incomes.

"If you have 45 per cent of the meatworks idled, why are cattle prices hitting record highs every week?

"It's a similar situation as to what's going on in Australia right now, but for a very different reason," he said.

Feeding China

China stipulates that boxed beef from Brazil must be from slaughtered animals no older than 30 months.

Mr Stuart said the booming beef trade between Brazil and China, was creating an intriguing situation for global cattle prices.

"It's a weird situation in Brazil and I'm still not sure how it's going to play out, but for right now, cattle supplies are extremely tight in Brazil," he said.

"They've killed more than one crop of cattle last year,  and they've killed younger cattle, and killed heifers, trying to fill that Chinese demand.

Mr Stuart said the tightening supplies of cattle in Brazil and Australia were worth following.

"Brazil and Australia are two of the largest beef exporters worldwide and both of them are seeing production fall this year, and exports fall this year, and that tightens the global supply," he said.

"You watch the interplay with what happens with beef.

"Countries like Japan that depend on Australian beef are seeing price hikes and availability problems.

"China has enormous demand for beef and now two of its biggest suppliers are seeing declining production and exports.

Lowest slaughter level in 35 years

It has been a tough year for Australian abattoirs and, according to Meat and Livestock Australia, processors are now on track for their lowest slaughter numbers in 35 years.

"As producers look to retain cattle and take advantage of the improved seasonal conditions, cattle slaughter is expected to fall [by] 11 per cent from 7.2 million head in 2020 to 6.4 million head in 2021," MLA's Stephen Bignell said.

"Export volumes are expected to fall 12 per cent to 1,350,000 tonnes [cwt], however the reduction in exports is a result of cattle supply shrinking and is not linked to demand.

"Demand for Australian beef remains high which can be demonstrated by the price being paid on a per kilo basis."

In its updated cattle projects for 2021, MLA said after years of drought, Australia's cattle herd rebuild was accelerating quicker than expected.

It is now forecasting a rise of 5 per cent to 25.9 million head by year's end.