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Australia’s November Beef Exports Trend Lower as Slaughter Slowdown Continues

Australian-Beef-Exports

Australia’s November chilled/frozen beef export volume was the lowest in more than two years at 93,817 metric tons (mt), down 17 percent year-over-year. Limited cattle availability has also caused some Australian plants to close early for the holidays. As expected, November exports to the United States (13,164 mt, -66 percent) were dramatically lower due to the import quota being filled, large inventories in freezers and plummeting U.S. prices for 90CL. November exports were also lower than a year ago to Japan, Taiwan, the Philippines and Hong Kong, but sharply higher to China (14,741 mt, +73 percent) and Canada (4,838 mt, +93 percent).

Despite a big first half in 2015, the recent slowdown put Australia’s January-November export volume steady with last year’s pace at 1.17 million mt. Exports were larger year-over-year to the U.S. (374,424 mt, +5 percent), South Korea (149,594 mt, +9 percent), China (135,045 mt, +18 percent) and Canada (40,229 mt, +32 percent) but lower to Japan (263,203 mt, -1 percent), the Middle East (48,796 mt, -11 percent), Indonesia (37,059, -27 percent), Taiwan (27,156 mt, -19 percent), the Philippines (22,292 mt, -30 percent) and the EU (21,671 mt, -11 percent).

While Australia is already China’s largest beef supplier, it will gain a further edge when the China-Australia Free Trade Agreement takes effect Dec. 20. China’s import duties on Australian beef muscle cuts will be reduced from 12 percent to 10.8 percent on Dec. 20, then drop to 9.6 percent on Jan 1. Duties on beef offal will be reduced from 12 percent to 10.5 percent, then drop to 9 percent on Jan 1.

Australia’s grain-fed beef exports could be record-large in 2015, as volume through October (218,602 mt) was up 17 percent from a year ago and 3 percent ahead of the record pace of 2006. While the destinations for Australia’s grain-fed beef continue to diversify, Japan still takes 53 percent of the volume. Exports have increased to all main markets, including Korea, China, the European Union, the United States, the Middle East and the Philippines.

Australia’s cattle indicator price has eased since early December to A$5.87/kilogram, but is still up about 60 percent year-over-year. In U.S. dollars, prices average $1.92 per pound, up 40 percent from a year ago.

Data sources: Australia’s Department of Agriculture Fisheries and Forestry, Global Trade Atlas and Meat and Livestock Australia