July 3, 2013

 

Australia's 2012-13 beef exports rise 7% on-year

 

 

Australia's beef export in the recently concluded 2012-13 fiscal year has risen by 7% over the previous year, totalling 1.014 million tonnes, surpassing all previous fiscal and calendar year records, according to the Department of Agriculture, Forestry and Fisheries (DAFF).

 

Driving the increased shipments through the one million tonne barrier for the past year was higher exports to China, the Middle East and Korea, while tough conditions to Japan continued to restrain shipments.

 

The rapid deterioration in seasonal conditions across many key beef producing regions, most notably through western Queensland, underpinned the sharp lift in cattle slaughter and beef production required to register the record exports throughout 2012-13. With the high turnoff and poor season came a resultant decline in cattle prices, which contributed to maintaining the price competitiveness of Australia beef, given the higher Australian dollar for much of the year.

 

However, while volumes reached a record high for 2012-13, the value of Australia's beef exports were mixed, demonstrating a two-speed global beef market. Strong global demand for cheaper, frozen beef (largely made up of manufacturing beef) pushed prices to near-record levels, while demand for higher valued chilled cuts remained sluggish, largely representative of tougher trading conditions into Australia's traditional north Asian markets.

 

On a monthly basis, exports for June totalled 87,788 tonnes, up 8% on the corresponding month last year and making the ninth consecutive on-year increase. As was the case for the past 12 months, China (10,657 tonnes), the Middle East (5,246 tonnes) and Korea (11,062 tonnes) accounted for most of the increase for the month, while shipments to Japan (down 24%, to 25,341 tonnes) and the US (down 7%, to 16,102 tonnes) declined.

 

For 2012-13, Japan remained Australia's largest beef export markets, at 298,840 tonnes, down 8% on the previous year and the lowest fiscal year volume since 2002-03. In contrast to Japan, Australian exports to Korea for 2012-13 increased 12% on-year, to 137,695 tonnes.

 

After showing improved volumes during the final few months of 2012, exports to the US slowed in recent months, as competition increased from other markets, namely China. For 2012-13, Australian beef exports to the US increased 1% on the previous year, at 206,571 tonnes.

 

The fastest growing market throughout the previous financial year was China, which went from taking 7,736 tonnes in 2011-12, to an astounding 92,278 tonnes in 2012-13, or an annual increase of 1,093%. A combination of tight local supplies, increased emphasis on food safety and rapid growth in the Chinese fast food sector contributed to the rapid increase in exports throughout the past 12 months.

 

Other markets, which have registered increased volumes of Australian beef for 2012-13, include the Middle East - up 51% on the previous year, to a record 47,912 tonnes. Growth was also registered to the Philippines (up 54%, to 29,667 tonnes), Malaysia (up 11%, to 16,563 tonnes), the EU (up 31%, to 17,515 tonnes) and Canada (up 37%, to 16,634 tonnes).

 

The growth of previously smaller markets, into major destinations for Australian beef, like China and the Middle East, continues to see less beef being sent to the "big three" markets of Japan, the US and Korea. For 2012-13, exports to markets, other than these countries, accounted for 36.6% of total exports, or 370,772 tonnes. For the previous decade, exports to other markets accounted for 19% of total exports, or an average of 173,992 tonnes.