February 17, 2011

South Korea's FMD outbreak boosts Australian, US beef exports

Australian and US beef exporters to South Korea have benefited from an FMD outbreak late last year in the North Asian country, an Australian marketer said Wednesday (Feb 16).

South Korean beef consumers have shifted to imported meat in the past several months from South Korean product because the local industry, which uses the Hanwoo cattle breed, "just can't supply enough to meet demand at the moment, and we're probably picking up the slack," said Jim Lim, a South Korean regional manager for marketing.

In broad terms, South Korea consumes about 600,000 bone-in tonnes of beef a year, half of which is produced locally. Australia supplied 53% of total imports in 2010, the US 32% and New Zealand 13%.

Australian exports to South Korea in 2010 of 124,160 boneless tonnes grew 7.5% on-year and were valued at AUD633 million (US$635.91 million), up 18% on-year. Australia is the second-biggest global exporter of beef, after Brazil, in an annual trade that was valued at about AUD4.4 billion (US$4.42 billion) in 2010.

Since the latest foot-and-mouth disease outbreak was discovered in late November in South Korea, authorities have embarked on a massive control, vaccination and eradication programme, including killing more than three million pigs, about one third of the South Korean herd, and 150,000 cattle, or about 5% of the national herd, which has helped contain the outbreak.

Lim said the culling programme has put a "noticeable dent" in the South Korean cattle herd and resulted in a short-term tightening of beef supplies.

Last year proved to be "a great year" for Australian beef exports to South Korea, while the 30% on-year growth in exports in January of 7,708 tonnes was a "great start" to the year, he said.

It's prudent to conclude this growth was due to demand arising from South Korea's celebration of the Lunar New Year in early February, but the impact of the outbreak has been an "influence on our numbers," he added.

Last week, North Korea also confirmed an outbreak of foot-and-mouth disease in its cattle herd, which Lim described as a real blow to the country's economic fortunes, and devastating from a humanitarian point of view given its ongoing food shortage. He couldn't provide further details.