February 19, 2013

Australia's 2012 beef exports to Canada up 54% on-year

Australia's beef exports to Canada in 2012 increased 54% on-year, to 15,661 tonnes swt - and while this is still well below 2003 levels (29,003 tonnes swt), trade has improved from only 6,940 tonnes in 2010.

The increase in Australia's beef trade to Canada registered during 2012 has continued into January 2013, with exports for the past month climbing 23% on-year.

While Australia is expected to be a more prominent supplier of imported beef to Canada in 2013 and 2014, volumes are anticipated to remain well below the 35,000-tonne tariff rate quota. The growth is expected to be fuelled by increased Australian supply, while high prices in the US continue to weaken Canadian demand for US beef.

The number of permits issued for Australian beef so far this year has outpaced those issued for New Zealand, according to Steiner Consulting Group. During January 2013, Canadian authorities issued 17% more permits for Australian grinding beef than year ago levels and 59% more permits for beef cuts, while those issued for New Zealand beef were reportedly down 42% for grinding and 37% for beef cuts. Permits for Uruguayan beef also increased, although volumes will be limited by the tariff rate quota of 11,809 tonnes.

Imported beef supplies in Canada were tight in January, with end-users continuing to buy from the spot market instead of placing forward orders, similar to market participants in the US. Imported lean grinding beef prices were firm, but are expected to increase in the coming months, as Canadian cow supplies decline at or below 2012 levels - depending on weather conditions and available feed supplies.

While imports of Australian manufacturing beef to Canada accelerated through January, Canadian cow meat and slaughter cow exports to the US have also increased in recent weeks. The rise was largely assisted by the weaker Canadian dollar against the US$. The increase in Canadian cow supply to the US has come at a time when US cow turn-off season had slowed, with limited cow numbers available for slaughter. The additional slaughter cow imports have helped alleviate the cow supply shortage in the US in recent weeks.