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Despite Record-large Exports in 2013, Concerns Continue for Australian Beef Industry

Australia-Ch-Fr-Beef-Exports

Australia’s chilled/frozen beef exports (muscle cuts only) totaled 1.099 million mt in 2013, increasing 14 percent from 2012 and setting a new calendar-year record. But these results were due in part to record slaughter, driven by drought in key cattle-producing areas, as well as a weakening Australian dollar.

“While such records always provide a sense of achievement, it is more a sad reflection of the desperately bad season experienced across the nation’s beef heartland areas of Queensland, western NSW, parts of Victoria and the Northern Territory, “ said the Jan. 4 edition of Beef Central. “The surge in cattle slaughter which started back in January in the face of rapidly deteriorating seasonal conditions continued throughout the year.”

After slipping below parity in May and continuing to weaken, the Australian dollar fell to the equivalent of 89 cents in December, down 14 percent from a year ago. For the year, the Australian dollar was, on average, 6.5 percent lower against the U.S. dollar than in 2012.

China and the Middle East were the largest growth markets for Australian beef, with China taking 154,833 mt (+371 percent from 2012). Exports to the Middle East totaled 60,565 mt (+94 percent), as Australia’s exports to Saudi Arabia surged to fill the void from Saudi Arabia’s bans on U.S. and Brazilian beef. Exports to South Korea were also higher (144,364 mt, +15 percent), although Korea still slipped to No. 4 among Australia’s export destinations, displaced by China. Other growth markets included Indonesia (39,418 mt, +45 percent but still not back to the 50,000 mt exported in 2010), the Philippines (26,992 mt, +5 percent), EU (19,806 mt, +33 percent) and Canada (17,897 mt, +14 percent).

Exports were lower to Australia’s top two markets, Japan (288,794 mt, -6 percent) and the United States (211,687 mt, -5 percent). U.S. beef continues to regain market share in Japan, as January-November import data show U.S. market share increasing from 26.5 percent in 2012 to 36.4 percent last year. Australia’s exports to the U.S. were down mainly as a result of other destinations outbidding the U.S. for Aussie beef.

A strong rebound in U.S. market share pushed Australia’s exports 10 percent lower in Taiwan (to 35,703 mt). Exports to Russia (30,317 mt, -13 percent) and Central/South America (9,411 mt, -51 percent) also declined as both Russia and Chile increased their imports of Paraguayan and Brazilian beef.

Australia’s chilled beef exports for 2013 (261,421 mt) were up just 1 percent from a year ago and accounted for 24 percent of export volume. Smaller exports to Japan (115,765 mt, -10 percent) and Korea (31,741 mt, -3 percent) were offset by growth to the United States (35,646 mt, +6 percent), EU (18,273 mt, +44 percent and reflecting the growth in grain-fed exports under the duty-free quota) and the Middle East (17,610 mt, +92 percent). Chilled exports to China (12,212 mt, +498 percent) were also higher, although China suspended chilled beef imports from Australia in late August.

Source: Export data is from Australia’s Department of Agriculture Fisheries and Forestry (DAFF) and includes only chilled and frozen muscle cuts.