High dollar, low production hurts Australian beef exports

Australia's beef exports during November posted a 17% year-on-year decline due to a combination of a strong Australian dollar and a significant reduction in beef production.

The high dollar has eroded export beef returns while production has remained low since the start of October.

Total shipments only reached 70,360 tonnes swt, the lowest November total since 1997.

Shipments to Japan were up 3% on-year at 27,720 tonnes swt, but volumes on a five-year average were down 22%. South Korea was a steady market, taking over 10,000 tonnes of Australian beef for the sixth consecutive month. Indonesian demand was strong at 5,117 tonnes, but was slightly below the record 5,347 tonnes in October.

Exports to the US fell to 13,115 tonnes swt, the lowest level since January 2008 and 55% below November 2008. US demand for Australian manufacturing beef has been subdued in recent months, with higher domestic supplies boosted by increased dairy cattle slaughter, and the stronger Australian dollar impacting US importer demand.

Given the sharp year-on-year decline in November, total shipments for the first 11 months of 2009 were down 3% on-year to 850,919 tonnes swt.

With beef production expected to have tightened over the remaining weeks of 2009, exports in December are also anticipated to be well below the 2008 level.