July 6, 2021
JBS cyber attack-related shutdown contributes to lower Australian beef exports in June
JBS Australia's week-long closure following a widely reported cyber attack contributed to substantially lower Australian beef exports during June, Beef Central reported.
While export volumes this year generally have been severely hampered by low rates of beef kill as Australia's herd enters post-drought recovery, the nation's largest beef processor's week-long closure only added to the trend.
Most of JBS's Australian plants in Queensland (four), New South Wales (two), Victoria (one) and Tasmania (one) missed a week's operations last month due to the cyber attack.
Total Australian beef export volumes to all markets last month fell to 73,551 tonnes, down 4% on the month before, and back 24,000 tonnes, or 24% on June last year. Reflecting the very low current rates of cow kill due to breeder retention, frozen boneless exports last month were just 46,000 tonnes, down 28% on the same period last year despite sharply rising prices in some markets for producing beef.
For the six months ended June 30, total exports reached just 422,412 tonnes – down 131,000 tonnes or 23% on the first-half last year, and 26% lower than the same period in 2019.
Most key markets registered declines in trade last month, in year-on-year measurements.
Japan took exactly 21,000 tonnes in June, down 4% on May and 3.3% lower than June last year. For the six months to the end of June, Japan has now taken 111,890 tonnes, down 19.6% on the same period last year, and 29% below the year before that.
Trade with China – mostly frozen boneless – dipped to 11,769 tonnes last month, down 14.5% on May exports and 5200 tonnes or 30% behind the same period last year. Accumulated trade for the first six months of 2021 has reached 72,154 tonnes – ranking China third in volume behind Japan and South Korea, but a little ahead of the United States. This represents a big fall compared with the same six months last year, when trade reached more than 121,000 tonnes (down 40%), as China continues to purchase larger, more competitively priced volumes out of South America and the US.
The US continues to import Australian beef at very low levels, in historical terms, taking just 12,178 tonnes last month. While a little higher than May tonnage, last month's exports were less than half those seen in June last year when the US was in the middle of a short imported beef buying frenzy as a result of COVID-related abattoir closures.
At one point last year, about 40% of US processing capacity was knocked out by COVID-related challenges.
For the first half, the US has accounted for just 65,294 tonnes of Australian beef – 49,000 tonnes or 43% behind the same period last year. That may be a record low for the six month period, as the US domestic beef kill continues to operate at high levels, impacted in part by a drought phase.
Beef Central columnist Steve Kay reported that ever-worsening drought across the US means 38% of its total cattle inventory is in some form of drought. Herd liquidation is continuing and cow slaughter year-to-date is up 124,700 head on last year, nearly all beef cows. By June 15, more than 26% of the western US was experiencing exceptional drought, the most intense level reported by the US Drought Monitor. Nearly 98% of the West was experiencing some level of drought.
South Korea continues to be one of Australia's most consistent export markets during current low rates of production.
Last month's trade reached 12,480 tonnes – ahead of the US and China in volume – and down only marginally on the previous month. June last year saw trade at a little over 15,100 tonnes, representing a decline of 17% this year.
For the first half of 2021, trade to South Korea has reached 76,181 tonnes – larger than both China and the US – and only 1,500 tonnes behind the same period last year.
Second-tier markets were a mixed bag last month, with Indonesia reasonably strong at 4,727 tonnes, up 27% on May shipments – following the completion of Ramadan on May 12 – and similar to June last year.
Accumulated totals to Indonesia for the first half of the year have reached 23,840 tonnes, down about 15% on last year.
The combined Middle East region took 2,288 tonnes last month, similar to May, but 33% higher than May last year. Six-month tonnage has reached 14,800 tonnes, up 16% on last year, but similar to the year before that.
Total EU trade reached just 435 tonnes in June, down another 32% on the month before, but similar to this time last year, as current tariff pressures weigh heavily. The entire EU trade for the past six months has reached just 3,928 tonnes, down 17% on last year.
Trade into the European Union is unlikely to gather any real momentum until a new free trade agreement with the United Kingdom is activated sometime in the second half of next year, and Australia reaches a new trade agreement with the remaining countries in the bloc.
- Beef Central