March 8, 2012

 

US to surpass Australia as top beef exporter

 

 

As drought forces farmers to slaughter more cattle, the US may become the world's top beef exporter in 2012, passing Australia where a strong currency is making the country's meat more expensive, an Australian industry official said.

 

Australia's exports of the meat are estimated to rise marginally to 1.44 million tonnes in 2012 from 1.4 million tonnes shipped last year, said Scott Hansen, managing director of Meat and Livestock Australia, the marketing arm of Australia's livestock industry.

 

"With a weaker exchange rate, the US has increased their exports to such an extent that they will become the top exporter this year," he said on the sidelines of an agriculture industry conference in Canberra. He did not give any estimate for US exports.

 

The Aussie fell to a six-week low against the US dollar on Wednesday after disappointing Australian GDP data, but it was just some US$0.03 away from a seven-month high set last week.

 

Hansen's projection outstrips estimates in an October 2011 report by the USDA. The USDA expects Australian beef exports to come in at 1.38 million tonnes in 2012, up from 1.35 million tonnes in 2011.

 

According to the USDA report, Australia was the biggest exporter of beef in 2011, followed by Brazil which shipped 1.325 million tonnes and the US at 1.241 million tonnes.

 

The report pegs 2012 US beef exports at 1.25 million tonnes.

 

Live cattle exports from Australia are likely to bounce back in 2012 to 500,000 tonnes, following a drop last year because of a ban on shipments to its biggest customer, Indonesia, over mistreatment of livestock.

 

"We see live cattle exports being an important part of meeting the increasing demand in Southeast Asia," Hansen said. "We do see live cattle exports growing back this year."

 

Hansen said there was strong demand for livestock coming from Southeast Asia and the Middle East, but added that Indonesia would remain its top buyer.

 

"There is always potential for growing live cattle exports to the Middle East and Southeast Asia region, however, we see bulk of our exports going to Indonesia," he said.

 

"We will also continue to see an increase in demand for cattle breeding in response to global demand," he said, adding that global beef demand was expected to outstrip supply from now to 2016.

 

In 2011, Australian live cattle exports fell to 320,000 head of cattle, down 40% on-year mainly due to the ban.

 

Australia suspended live cattle exports to Indonesia for a month in 2011 after a video showing cows being beaten and whipped before slaughter was aired on Australian television. The footage outraged many Australians, while the government response angered farmers who said the move jeopardised Australian jobs.

 

But a fresh footage that animal rights activists said showed cows being inhumanely treated in an Indonesian abattoir were broadcast in Australia last month, which the government has said will be investigated.

 

US live cattle on Tuesday posted its biggest day of losses in three months after packers slashed cash prices and bullish Chicago Mercantile Exchange live cattle traders looked for a reason take profits after futures hit a record high of US$1.31250 per pound last Friday.