January 8, 2004

 

 

Australia Insists Meat Supply To Japan Sufficient

 

The Australian beef industry insists that they will be able to meet the increased demand for Japanese beef imports following the US mad cow case, despite a drought-induced shortage.

 

Industry officials will tell Japanese representatives over the next two days that Australia can supply "significantly more" beef to North Asia in the coming year.

 

Meat and Livestock Australia's marketing services manager, Peter Barnard, said the options to increase supply would include greater production as cattle producers opted to sell more cattle because of higher prices, diversion of product from other export markets, including the United States and Canada, where beef prices were now relatively lower, and possibly some diversion from the domestic market.

 

Japan is a major market for both Australian and US beef exports, with the US traditionally having a market share of about 45 per cent, or more than 400,000 tonnes. Wholesale prices for Australian beef in Japan leapt 40 per cent this week when the markets re-opened for the first time since the US discovery of mad cow disease.

 

The Japanese delegation will meet industry representatives in Queensland today, and beef lobbyists in Sydney on Friday. There has been speculation about whether Australia can make up the shortfall created by the Japanese ban on American meat imports.

 

Deputy Prime Minister John Anderson said the situation would be positive for Australian beef prices, but that the timing was unfortunate given the long-term effects of the drought.

 

"The irony is we've probably got the least amount of beef available for export now than we've had for the last decade anyway because of the drought," he said.

 

But Cattle Council executive director Brett de Hayr said supplies should be adequate.

 

"It really depends on where the product is re-diverted from," he said. "There is certainly enough volume, it's a question of how the marketplace plays out as to where it goes."

 

Mr de Hayr said they could not rule out diverting meat from the domestic market to fill overseas demand, but it was unlikely.

 

"A fair degree of the product that we consume here domestically isn't the type of product that is consumed in Japan, so diversion in the short term is going to be more difficult."

 

Major players in the $4 billion Australian beef industry said the long-term impact of the discovery of mad cow disease in the US remained unpredictable.

 

Malcolm Foster , the managing director of one of the country's biggest feedlots, Japanese-owned Rangers Valley, said the ban on US beef exports by more than 30 countries, including Japan and Korea, could be relatively short-lived.

 

"It's a punt to race out and buy heaps of cattle in the hope this will still be going in a few months' time," Mr Foster said. "And if everyone runs out and buys them you are going to drive the price of cattle up, and it's very likely those cattle will turn off [be sold] when America is back exporting to Japan again with a fair bit of product and possibly some very competitive prices in the market.

 

"The other factor is the Australian dollar is going up at a million miles an hour that's not helping Australia's competitiveness."

 

But Paul Troja , the general manager of Rockdale Beef feedlot, also Japanese-owned, said the earliest resolution of the US problem was likely to be in six to nine months.

 

Japan said yesterday it would wait about nine days for the report of a fact-finding mission to the US before making any decision on its two-week ban on American beef.