September 26, 2011

Australia's beef and veal exports expected to show decrease

Australian beef and veal exports are set to decrease 1.8% on-year in 2011-12, to approximately 920,000 tonnes swt, according to the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Agricultural Commodities report.

ABARES expects the fall in overall export volumes will result from lower shipments to Japan and historically low exports to the US.

Exports to Japan in 2011-12 are forecast to total 325,000 tonnes swt, falling 7.4% on year ago levels. The report highlights the high Australian dollar, subdued demand and increased competition from the US as the driving factors behind the fall in shipments. Exports to the US are expected to remain stable on-year, to 160,000 tonnes swt, despite the strong Australian dollar and high US beef production.

Continuing restocker demand in 2011-12 is expected to maintain upward pressure on young cattle prices, although prices for other categories are expected to average lower over the same period due to subdued demand from the major beef export markets. As a result, average weighted saleyard prices are forecast to fall 4% on-year, to AUD3.10/kg (US$3.04) dwt in 2011-12.

The national cattle herd is estimated to reach 28 million head in 2011-12, up 2.2% on-year, as a result of favourable pasture growth and increased water availability. Slaughter levels are expected to fall by 1.1% on-year, to eight million head, due to restocking efforts, subdued export demand and lower prices.