January 3, 2007

 

Changing profile of Australian beef market

 

 

With beef exports at record levels, it is interesting to note how incidents like the drought in Australia and mad cow disease outbreaks in the US have changed the Australian beef industry in recent years.

 

Meat and Livestock Australia statistics for the year 2005 demonstrates how the export market is built around sales to North Asia (namely Japan, South Korea and Taiwan) and the US, with other countries peripheral players.

 

Any major change in these markets affects Australian sales. Increasing sales of Australian brisket and chuck rolls are a case in point.

 

Exports of Australian brisket increased by 89 percent in the past five years to 62,450 tonnes in 2005. In the absence of US beef cut, Australian brisket has been filling the demand. Brisket is a cut of meat from the breast or lower chest and is particularly preferred in Japan. 

 

The Increasing demand for meat has led to exporters harvesting brisket as a specialist cut from a carcass, whereas in the past it was usually downgraded to manufacturing beef.

 

Sales of chuck rolls increased by 116 percent in the past five years owing to the same reason. Chuck rolls is also a popular variety in South Korea and Japan.

 

As a result of these cuts being diverted to new higher value markets, there has been an overall fall in manufacturing beef sales from Australia.

 

Exports of manufacturing beef fell to 40 percent in 2005. It once accounted for 48 percent of total Australian sales.

 

However, the main reason for the decline in manufacturing beef exports has been a tighter supply of culls since the 2002 drought as farmers have tried to rebuild their herds.

 

This trend would continue due to an expected shortage of female cattle once this current drought breaks.

 

Incidentally, while both Japan and South Korea have lifted their ban on US beef imposed due to an outbreak of mad cow disease, stringent restrictions by the two markets have prevented US beef from returning to either marketplace. This seems to have worked well for Australia which has been increasing its exports.

 

Another change to the industry has been a rapid growth in grainfed beef, partly due to poor weather conditions in recent years that have restricted grassfed production.

 

Grassfed beef held a 74 percent share of export sales in 2005. Yet only seven years ago it comprised 99 percent of all exports, according to MLA.

 

Exports of grainfed beef on the other hand, increased from just 5,212 tonnes in 1998 to 233,023 tonnes in 2005.