July 6, 2006
Droughts from the past come back to haunt Australian beef exports
Australian beef exporters are feeling the aftereffects of a severe drought that occurred 3 years ago, MLA representative Peter Weeks said on Wednesday (Jul 5).
The hot, dry weather in Australia in 2002 and 2003 which caused pastoral conditions to worsen meant fewer calves because of a combination of low conception and birth rates and high calf death rates, weeks said.
The 3.8 percent decline in total Australian beef exports in the first half of 2006 is almost entirely attributable to drought, Weeks said.
A shortage of grass-fed grown steers is weighing on exports to Japan, although there has been an increase in the number of grain-fed beasts over the past two years, Weeks said.
While grain fed beef to Japan increased from 35 percent in 2003 to 46 percent in 2006, the proportion of grass fed beef declined from 65 percent to 54 percent.
Demand for Australian beef has been strong since late 2003, mostly due to a lack of competition from the US in Japan and South Korea.
Australian beef exports to Japan in the first calendar half fell 8 percent to 195,559 tonnes on-year. Weeks said continued uncertainty about the return of US beef to Japan weakened demand for Australian beef.
In the US, Australia's second biggest beef export market, demand has slackened considerably this year, in part due to abundant supplies of chicken and pork.
Drought conditions in the US have also pushed considerable quantities of beef onto the market as producers led their cows to early slaughter.
In the calendar first half, Australian beef exports to the US fell 14 percent on-year to 147,608 tonnes.
Despite the declines to Japan and the US, exports to South Korea grew 33 percent on-year as tightened inventories forced the country to import more beef. South Korea just had to be in the market, Weeks said. Beef exports to South Korea in June were up 68 percent from June last year. Exports to other markets such as Taiwan and the CIS also registered strong growth.
