July 16, 2014    

US tops Japan as Australia's biggest beef export market
 

The United States has surpassed Japan as Australia's single largest beef export market, even while Australia's cattle numbers are almost at their lowest in 20 years, ABC reports.

With the US cattle herd at a 60-year low, Australia has filled the gap in US demand with 90 cl beef, or manufacturing beef. Australian exports of the high-volume, low-price beef to the US have increased by 34% on-year.

This increase is notwithstanding Australia's cattle numbers heading towards their lowest in 20 years. Extended drought in Queensland and parts of New South Wales, coupled with record exports of meat and live cattle will result in a cattle herd of 26.1 million by June 2015, down even further from the current 26.7 million.

Cattle prices are said to rise by 40%, as tight supply meets continued record export demand, but the time taken for the increase is uncertain. In a mid-year update, Meat and Livestock Australia (MLA) chief economist, Tim McRae, said, "The limiting factor in a price turnaround for the Australian market will be seasonal conditions for the remainder of 2014 and the northern 2014-15 wet season - which will be key to watch."

Live exports are tipped to exceed 1.1 million head this year, which will be the highest in a decade. Beef and veal exports are forecast to match 2013's record levels at 1.1 million tonnes.

MLA's mid-year update also included the following export forecasts:

South Korea are tipped to fall 14% during 2015, due to Australia's tightening supply and higher prices.

Japan are expected to fall 7% to 250,000 tonnes in 2015 for the same reasons.

US tipped to drop slightly from the current high levels. In 2015 exports are forecast to drop 2% to 14,000 tonnes.

China is expected to import 140,000 tonnes this year, a fall of 10% on-year. It is forecast to dip a further 7% in 2015.

Russia has suspended imports from Australia, and is taking only 5000 tonnes this year. MLA does not expect to see a recovery in the trade soon.
 

On the topic of record export demand, Cattle Council president Andrew Ogilvie is concerned that not much of that value is currently flowing back to cattle producers. However, he is confident that rain will bring up store cattle prices.