January 4, 2008

 

US beef exports pose challenge to Australia

 

 

Japan and South Korea's gradual purchase of US beef will certainly affect Australia's exports in 2008, particularly from the West, according to Meat and Livestock Australia (MLA).

 

Though US exports of beef to Japan in 2007/08 are expected to remain well below pre-mad cow disease levels, Australian beef exports to Japan are expected to fall by 6 percent due to saleyard price of cattle and costs associated with supplying beef.

 

As South Korea is seen to soften its stance against US beef, Australian beef is also expected to drop by 29 percent in 2007/08.

 

Higher local prices for manufacturing beef in the US and Uruguay are expected to lead to increased demand for Australian beef but the decline in the Australian female cattle slaughter is expected to result in a 10 percent fall in beef exports to the US.

 

MLA said the 10 to 14 percent rise of A$ against the US$ and the Japanese has led to a decline in export returns and cattle prices.

 

MLA managing director David Palmer said near-term cattle price trends were very difficult to predict as a range of major opposing factors such as falling US dollar, US' return to Japan and Korea, possible drought, falling supplies and weaker Brazilian competition are likely to operate in 2008.

 

Palmer said he is only confident of some price rise for breeding and store stock, providing the drought breaks and grain prices ease.

 

Although the Australian beef industry is seen to make productivity gains, there are still a lot of things to be done to remain competitive globally, he said.

 

These productivity gains must be spread out along the supply chain as well, to include livestock producers, processors and retailers, Palmer added.

 

In response to this call, the West Australia (WA) Agriculture and Food Department has launched the "Buy West, Eat Best" to urge more consumers to support local butchers and supermarkets. 

 

The campaign actually started last year and is expected to continue into 2008, with many consumers thinking the safety of the beef they eat.

 

Growth in the organic beef market is also expected to increase in Australia following on from trends in the UK where organic produce is in higher demand than can be supplied locally.

 

WA beef producers aim to increase its processing ability to capitalise on the growing demand for protein around the world.

 

On the other hand, the opening of South Australian meat processor T & R Pastorals recently purchased North Dandalup abattoir is expected to provide much-needed increased slaughter space.

 

Despite the resolution made at last November's Red Meat Crisis meeting to ask the State Government to provide all environmental clearances within 14 days of the abattoir to aid competition in WAs processing sector, no exact time frame has been given as to when the abattoir will open.

 

Completion of the new Muchea saleyards is also expected in 2008, with funds from the sale of land at Midland expected to be re-invested in both Muchea and South-West saleyards.

 

The crisis meeting also resulted that a farmer-owned service-kill facility be established alongside a saleyard facility in WA to give producers the opportunity to market their own beef produce.

 

The Red Meat Crisis Committee was formed at the end of 2007 as a result of the meeting in November. It is a proposed board of representatives from industry.

 

During 2008 the committee will be advancing the nine motions passed at the Bunbury meeting last year aimed at ensuring red meat producers get fairer returns.

 

WA Farmers and the PGA have asked meat producers to get behind the meat producers fighting fund and either or both organisations through membership and support in 2008.