February 7, 2007

Australian beef firm sees bright future in North Asia

The short and long-term prospects for Australia's beef industry in Japan and South Korea appear bright, with exports from the US to North Asia only likely to build slowly given its reticence to meet customer needs, said Don McKay, chief executive of Australian Agricultural Co (AACo).

He expects the protocols restricting the entry of US beef into Japan and South Korea to continue to provide opportunities for Australian beef to maintain a high market share in these countries through 2007.

Australia has been at the forefront of livestock traceability for more than 40 years. This has helped Australian beef make a mark in the international market.

McKay noted that Australia exports about two-thirds of its beef production, making it the second largest exporter by volume in the world after Brazil, but the biggest exporter by value.

The US beef exports, on the other hand usually account for 5-6 percent of production.

Therefore, US might not be able to recover major markets in the North Asian countries, said McKay, whose company, after selling almost 200,000 beasts last year, still had more than 555,000 cattle in its herd at Dec 31, making it the biggest in Australia and one of the largest beef producers in the world.

Besides, the US might not be able to gain its lost share in Japan and South Korea as the two are unlikely to lower their import standards he said

While McKay agreed Brazil has been trying to make inroads into secondary Australian markets, including South-east Asia, the Middle East and eastern Europe, it would not be able to enter Australia's key high value chilled and frozen markets of Japan, South Korea and the US for some years due to the presence of foot-and-mouth disease in some herds.