Still driven by a drought-induced surge in slaughter levels, Australia’s 2014 chilled/frozen beef exports in 2014 easily surpassed the record total from the previous year, increasing 17 percent to 1.287 million metric tons (mt). Exports accounted for 74 percent of Australia’s production. Growth was led by a large increase in exports to the United States (396,396 mt, +87 percent), which was fueled by record prices in the U.S. for 90 CL and further assisted by a weakening Australian dollar and the U.S.-Australia Free Trade Agreement.
Much more modest increases were reported for Japan and South Korea. Exports to Japan totaled 293,778 mt, which was up 2 percent from 2013 but still below the previous five-year average. Exports to Korea increased 5 percent to 150,918 mt. China (124,585, -19 percent) slipped back to fourth place among Australia’s export destinations as volumes declined following China’s enforcement of its hormone ban, which began in May of last year. Although still a small destination for Australian beef, exports to Hong Kong nearly tripled to 14,739 mt.
Chilled exports increased 18 percent to 307,899 mt. Chilled beef accounted for 24 percent of Australia’s muscle cut exports, which was steady with the ratio posted in 2013. Growth was led by a near-doubling of exports to the United States (70,832 mt, +99 percent), but exports also increased to to Asia (185,175 mt, +4 percent), the EU (23,335 mt, +28 percent) and the Middle East (20,065 mt, +14 percent).
This week Meat and Livestock Australia (MLA) released beef production and export projections for 2015. Australia’s cattle herd is estimated at 26.8 million head, a two-decade low. Slaughter is projected to be 7.8 million head – down 15 percent from the drought-driven 2014 total, but still slightly above the previous 10-year average.
Projected 2015 beef production (2.19 million mt, -14 percent from 2014) and exports (1.03 million mt, -20 percent) also reflect a gradual recovery from drought conditions. Exports are expected to decline across all markets, reflecting the adjustment back to historic production and export volumes. However, MLA expects the U.S. to again be the best-performing market, bolstered by continued decreases in U.S. production and a strong U.S. dollar.
Australia’s 2015 grain-fed beef exports are expected to be relatively steady with the 2014 volume of 230,000 mt, which was 12 percent above the previous five-year average. Japan takes about 57 percent of Australia’s grain-fed beef exports, followed by Korea. But the EU has also been a growing destination since Australia gained access to the grain-fed, duty-free quota.
Further reflecting the anticipated herd rebuilding, MLA expects Australia’s live cattle exports to decline by about 30 percent, to 850,000 head, after hitting a record 1.2 million head in 2014. All projections depend on sustained rainfall, but widespread rains across key cattle-producing regions have caused cattle prices to surge since Christmas, suggesting that this year could be the turning point.
USDA FAS & AMS
Australian Department of Agriculture
Meat and Livestock Australia