January 9, 2004

 

 

Australian Beef Export Prices Surge In Mad Cow Aftermath

 

Export prices for Australian beef surged in its three major markets following the US mad cow disease case, marketing concern Meat & Livestock Australia Ltd. reported Friday.

 

The gains are biggest in Japan's wholesale market for imported beef, with prices of some products increasing by half from Dec. 19, it said.

 

Wholesale prices for Australian beef in South Korea's wholesale market have risen up to 40% from Dec. 19, while beef export prices to the U.S. mostly have posted more modest gains, it said.

 

"It is difficult to predict where export prices of Australian beef to Japan and Korea will settle, with the trade only just restarting after the Christmas break, a number of major (meat)works yet to reopen in Australia and the Australian dollar appreciating further," it said in a special market report.

 

Japan, South Korea and nearly all U.S. export markets banned the import of U.S. beef after the discovery in the U.S. of the BSE case, announced Dec. 23.

 

Australia, which exported beef worth A$3.75 billion last fiscal year, usually competes with the U.S. to supply Japan and other markets.

 

The U.S. also was Australia's biggest beef export market in 2003, taking 368,010 tons of bonefree beef.

 

MLA said there still isn't any clear indication from authorities in the U.S. or in its major export markets as to when the trade in U.S. beef will resume.

 

Australian cattle auction markets haven't restarted in earnest after an end-of-year holiday break, it said.

 

A number of major meat works haven't recommenced quotes for cattle, while others are adopting a wait and see attitude, it said.

 

"However, initial indications from the markets this week suggest strong lotfeeder interest in medium weight trade steers of over 300 kilograms liveweight and store buyer interest for lighter weights," it said.

 

Wednesday, Tony Gooden, Queensland state manager for Futuris Corp.'s Elders livestock agency, said prices for heavy bullocks suitable for Japan had jumped to A$0.70 cents a kilogram dressed weight since pre-Christmas to almost A$4.00/kg, in direct sales to processors from producers.

 

By comparison, a February U.S. live cattle contract traded around 15% down this week from Dec. 19 levels, MLA said.

 

Turning back to Australian beef exports, MLA reported spot prices for Australian chilled grassfed fullsets at Japan's Kanto wholesale market are quoted Friday at Y1,035/kg, up 51% from Y685/kg Dec. 19. A fullset comprises about a dozen beef cuts.

 

A grainfed longfed fullset is quoted at Y1,500/kg, up 13% from Y1,330/kg Dec. 19. Longfed cattle are fed grain for a minimum 300 days, it said.

 

In South Korea, the wholesale price for an Australian chuck roll is quoted at 6,867 won a kg (US$=KRW1,181.7), up 40% from KRW4,900 Dec. 19. Rump steak is quoted at KRW6,333/kg, up from KRW4,800 Dec. 19.

 

In the U.S., Australian frozen 90 chemical lean cow beef is quoted at US$1.18 a pound (including carriage, insurance and freight), up from US$1.11/lb Dec. 19.

 

The free on board price in Australia for these products is quoted at A$3.02/kg estimated dressed weight, up from A$2.97/kg Dec. 19, it said.