September 29, 2017

 

Global beef trade marked by major changes - report

 

 

The global beef trade is going through several major changes including a recuperating beef industry in Australia and increased tariff imposed by Japan on frozen beef, according to the Rabobank's latest beef quarterly report.

 

In the first seven months, the US dominated the beef trade, with exports up 11% year-on-year in volume and up 15% year-on-year in value terms.

 

The agricultural lender's third-quarter report on beef said the export growth highlights the ongoing availability of product for export from the US, in contrast to challenges in exporting from Australia and Brazil.

 

US beef exports were up for the year to date to Japan (22% year-on-year), Hong Kong (33% year-on-year) and Canada (5% year-on-year).

 

Australia, on the other hand, has been restricted by availability of beef for export, while the tainted-meat scandal in Brazil slowed exports of all proteins in the first half.

 

Stronger-than-expected beef imports

 

At the same time, the US has recorded stronger-than-expected beef imports, which are up for the year to date by 11% year-on-year.

 

In the case of Australia, the report noted the country's beef-production recovery, as monthly output volumes changed course, increasing by 11% and 20% year-on-year, respectively, for the months of June and July, after almost two years of decline.

 

"Is this the start of the rebuild, with increases in export volumes to follow, and cattle and beef prices to ease, rebuilding Australia's presence and competitiveness in global markets?" the report wondered.

 

Angus Gidley-Baird, senior analyst -- Animal Protein, said, "While the decline in production has stopped, Australia's ability to rapidly increase production--as has been seen in the US--will be limited, and a more gradual increase into global markets is expected".

 

Meanwhile, nations sending beef to Japan--except Australia, Mexico and Chile, which have trade agreements--got a jolt after the Japanese government increased the tariff on imported frozen beef to 50% as a safeguard measure.

 

Brazil's strong recovery

 

Over in Brazil, beef exports showed a strong recovery during the third quarter. In August, they reached their highest level in four years. Consequently, beef exports reversed the negative results and already increased slightly in the first eight months. Moreover, Brazilian beef exports are likely to sustain volumes above 2016 levels during the fourth quarter, the report said.

 

Argentina also hopes to start shipments of fresh beef to the US. Last month, negotiations appeared to have taken a step closer to reaching an agreement, when Argentina announced that it had opened its market to American pork products, showing that bilateral meat trade is under discussion.

 

If Argentina is successful in gaining entry to the US fresh beef market, it will have access to a 20,000-tonne beef quota, according to Rabobank.

 

China, meantime, is eager to explore ways in which to increase beef supply in the domestic market, the third-quarter report said, noting that in August it imported a total of 6,710 female cattle for breeding purposes.

 

The eagerness shows in the physical shipment of the breeding cattle, which is "not the normal practice--as frozen semen is usually imported for genetics improvement". --Rick Alberto