November 2, 2004



Australian Beef Exports Slow with Drop in Grass-Fed Cattle Supplies

Australian beef exports grew at the slowest pace in six months in October as supplies of grass-fed cattle declined, thereby trimming sales to the US. Australia is the world's biggest seller of beef.


According to the Department of Agriculture, Fisheries and Forestry in Canberra, beef shipments increased 4.1 percent to 83,711 metric tons last month from a year earlier. This figure is the slowest year-on-year growth since April.


Ranchers are slowing cattle sales to rebuild herds that fell last year because of the country's worst drought in a century. That reduced Australia's ability to meet increased demand from Japan and South Korea. These 2 countries were among more than 40 countries which banned US beef in December after the discovery of one case of mad cow disease in a Washington state herd.


Tight Supply


Tighter cattle supplies pushed prices on the benchmark Eastern Market Indicator to a record A$3.98 a kilogram on Sept. 15. They increased 1.8 cents, or 0.5 percent, to A$3.683 currently, and have gained a 10th in the past year, helped by export sales that surged 28 percent to A$3.34 billion ($2.5 billion) in the nine months ended Sept. 30.


Australia's October beef sales to Japan, the most valuable overseas market for the country's meat, rose 24 percent from a year earlier to 35,610 tons. Exports to South Korea jumped 26 percent to 6,385 tons.


Exports to the North Asian countries may slide once US beef sales there resume.


Shipments to the US, the biggest buyer of Australian beef by volume, decreased 3.1 percent to 35,591 last month.


"While supplies of grain-fed cattle from feedlots are still relatively high, the amount of grass-fed beef available is much lower than you would expect for this time of the year,'' said Peter Weeks, chief market analyst with Sydney-based Meat & Livestock Australia.


Only Brazil exports a greater volume of beef and beef products than Australia, though Australia's were more valuable in 2003.

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