Tougher times for Aussie beef exporters in 2009-10

In this fiscal year to June 30, 2010, increased competition from the US in key markets and the strong Australian currency will continue to pressurise and limit Australian beef exports.

Export volume will fall 1.9% to 950,000 bone-free tonnes in 2009-10, while value will drop 8% to A$4.47 billion (US$4 billion), according to projections from the Australian Bureau of Agricultural and Resource Economics (Abare), the government's chief commodities forecaster.

This forecast is based on the assumption that the average exchange rate for the Australian dollar this fiscal year will be US$0.89, up from a September estimate of US$0.83, and up from the actual average of US$0.75 in the last fiscal year.

The exchange rate is expected to weaken US demand, which would cause shipments to the US to slump 11% to 250,000 tonnes from 282,000 tonnes in 2008-09.

In addition, beef exports to Japan and South Korea will slightly decline this fiscal year due to rising US beef imports. Shipments to Russia could plunge 60% to around 15,000 tonnes, while exports to Indonesia could rise 10% to 42,000 tonnes, Abare said.

Live cattle exports this fiscal year will fall 0.9% to 848,000 head from 856,000 last fiscal year, mainly because of lower supplies of exportable cattle.

Australia is the world's second-biggest exporter of beef, after Brazil. For the fiscal year 2008-09, Australia's beef export volume was 968,000 tonnes, and the value was A$4.86 billion (US$4.37 billion).