May 7, 2007

Australia's Q1 beef exports at record pace

Australia's beef and veal exports has surged in the first four months of 2007, totalling a shipment record of 300,168 tonnes slaughterweight (swt), according to Australian Department of Agriculture, Fisheries and Forestry.

Export volumes from January to April registered soared to 9 percent amid the strong Australian currency and decreasing demand on some foreign markets.

Orders from Japan, South Korea and the US has been seemingly slow recent months as the stronger Australian dollar has affected export returns and its price competitiveness against local beef in overseas markets. The re-entry of lower-priced US beef in South has resulted in falling demand of 46 percent on March and 18 percent last year, to 7,480 tonnes swt - the lowest monthly volume since January 2006.

Meat and Livestock Australia (MLA) had earlier projected that this year's Australian beef exports to Korea would plunge to 27 percent on 2006 levels, to 110,000 tonnes swt, based on the entry of an assumed 80,000-tonne US beef. Australian shipments were up 40 percent, to a record 49,436 tonnes swt as it is either to meet or exceed the initial forecast of 110,000 tonnes, depending on the timing of full re-entry of US beef, along with a rebound in end user demand.

Strong demand for Australian chilled beef in the US has April exports to the US rose to 20 percent on last year to 27,110 tonnes swt, amid slow US demand for imported manufacturing beef and high US cow slaughter. By far, beef shipments to the US so in 2007 are up 4 percent on 2006, to a four-year high of 95,990 tonnes swt.

Export prices and seasonal conditions will continue to have a large influence on Australian shipments to the US for the rest of this year, with expected drop in export returns for manufacturing beef likely due to shift in more lucrative markets. Further, a significant improvement in seasonal conditions across eastern Australia should reduce cow turnoff rates and tighten available cow beef supplies.

Beef shipments to Japan for the first four months of 2007 were up 1.5 percent on the same period in 2006, to 126,147 tonnes swt - the second highest level on record behind 2005 (136,746 tonnes swt).