March 1, 2005

 

 

Renewed competition is to be faced by Australian beef exporters

 

The nation's chief commodities forecasted that Australia's beef producers face tougher times as they lose market share in Japan to North American exporters.

 

This prediction is based on the assumption that beef will get re-entry into Japan, this year, from United States and Canada.

 

As there were cases reported of MAD COW disease in Japan and Korea, the lucrative markets were totally locked out.

 

The Australian Bureau of Agricultural and Resource Economics (ABARE) said Australian beef and veal exports are tipped to rake in $A4.2 billion ($US3.32 billion) this financial year, but the figure is expected to fall to just under A$4 billion in 2005-06.

 

Strong competition from South American beef exporters would also have an effect.

 

ABARE's forecasts assume substantial exports of US beef into Japan later this year.

 

"This is expected to result in the displacement of Australian beef in the Japanese market, placing downward pressure on prices," ABARE said in its Australian Commodities report, released today.

 

"As a consequence, for 2005-06, Australian beef exports to Japan are forecast to fall by four per cent to 355,000 tonnes, with export prices forecast to decline by nearly 13 per cent to 372 cents a kilogram."

 

Australia's beef exports to Japan are expected to fall to 315,000 tonnes by 2009-10, which could be worth about A$3 billion in today's dollar terms.

 

Korea, Australia's third largest export market which also banned North American beef because of mad cow disease, is expected to import about six per cent less Australian beef in 2005-06.

 

Current strong saleyard prices for beef are likely to ease slightly for the remainder of the current financial year, due to assumed weaker demand from the US and Japan.

 

The situation will get worse in 2005-06, with saleyard prices dropping 13 per cent, and will continue to fall over the medium term to 2009-10, ABARE said.

 

For the pig meat industry, saleyard prices are tipped to ease for the rest of 2004-05 as production increases, but should still average higher than the previous year.

 

Greater global competition from North American exports and a 12 per cent appreciation of the Australian dollar in 2004 resulted in a 27 per cent drop in Australia's pig meat exports that year.

 

ABARE today tipped exports to fall further over the next few years.

 

Australia's poultry industry will face tougher competition as Asian flocks recover from the bird flu epidemic and production increases in Brazil, the world's biggest poultry meat exporter.

 

Exports from Australia are forecast to fall almost four per cent in 2004-05 and should recover slightly the following year.