March 6, 2013

Australia's February beef, veal exports hit record high

Australia's beef and veal exports hit an all-time high in February at 80,534 tonnes swt, up 2% on-year due to the increased flow of cattle into processing plants in early 2013, combined with an eruption in buying from China and the Middle East.

This is according to the Department of Agriculture, Forestry and Fisheries.

For the first two months of 2013, Australian beef and veal exports totalled 135,681 tonnes swt, an increase of 8% on the same period in 2012. While the record monthly volumes to both China (11,866 tonnes swt) and the Middle East (5,463 tonnes swt) were welcomed by the trade, it is in contrast to the on-going tough conditions for higher priced chilled beef into Japan and Korea.

For February, Australian beef exports to Japan only reached 21,120 tonnes swt, down 10% on-year, and the lowest February total since 2003. While the change in access conditions for US beef slowed Japanese buying activity, the unfavourable movement in the Japanese currency and increased competition from China also impacted Australian volumes for the month.

Exports to the US for February totalled 17,067 tonnes swt, a decline of 23% on the corresponding period in 2012 and well below initial expectations at the start of the year. Even the lower Australian dollar (down 5% on February 2012) and high prices for beef throughout the month were not reflected in volumes to the US, most likely due to increased competition globally for manufacturing beef, most notably from China. For the first two months of 2013, Australian beef exports to the US are down 17% on-year, totalling 29,015 tonnes swt.

Exports to Korea in February reached 9,367 tonnes swt, down 2% on-year. Other Asian markets to register a good February included the Philippines (up 8%, at 2,009 tonnes swt), Taiwan (up 11%, at 2,818 tonnes swt) and Thailand (up 19%, at 587 tonnes swt). Another highlight for the month was a record volume of beef exported to the Middle East, reaching 5,463 tonnes swt, up 146% on-year. This has largely been a continuation of the steady growth in Australian protein exports to the region over the past few years, with Australian beef exports in 2012 totalling 31,351 tonnes swt.

Assisted by the increased access for Australian grainfed beef, total beef and veal exports to the EU increased 18% on-year during February, to 1,082 tonnes swt, with exports for the first two months of 2013 up 33%. However, February also saw several markets contract in size, most notably Russia (down 54% on-year, to 1,363 tonnes swt) and Indonesia (down 23%, to 2,076 tonnes swt). For Russia, the price disparity between Brazilian and Australian beef (accentuated by favourable currency movements for Brazilian beef) continues to see a slowdown in Australian exports, while exports to Indonesia are limited by import permit allocations.