November 2, 2021


Australia's chilled, frozen beef exports drop 8.6% in October



Low rates of beef kill due to herd rebuilding have characterised Australia's 2021 slaughter season, and the trend was evident in the country's October beef export statistics.


Australia's Department of Agriculture figures show that chilled and frozen exports to all markets last month reached just 74,333 tonnes. That's down about 7% on the previous month, and 8.6% behind October last year, when rates of slaughter were already in sharp decline as the industry responded to rain.


For the calendar year to date (past ten months of trade), Australia's exports have reached only 734,908 tonnes – almost 140,000 tonnes or 16% behind the same period last year, which itself was starting to be compromised by the after-effects of post-drought recovery.


A better comparison is the average of the five years prior to 2021, which shows Australia's ten-month exports to the end of October averaging more than 900,000 tonnes. In the standout 2019 year when drought impact reached its zenith in liquidation, exports to October had already topped 1.009 million tonnes.


All major and emerging export markets bore the impact of cattle supply challenges evident in last month's trade figures.


Most noteworthy was the continuing decline in volume into the United States, which last month again slipped into third place in Australian export customer rankings, behind Japan and Korea. China continues to languish in fourth place.


Volumes to the US last month reached just 13,633 tonnes, down almost 11% on the previous month and 8.4% short of trade seen in October last year. Long-gone are the days when the US dominated Australia's trade volume, with monthly tonnages of 25,000 tonnes to 30,000 tonnes.


Year-to-date, the US has taken 121,715 tonnes – back an enormous 65,000 tonnes or 35% on the same period last year.


Relatively high beef production in the US, combined with price premiums being asked for Australia's imported lean grinding beef, are both factors. Steiner reports current US domestic 90CL fresh boneless beef at around US275c/lb, implying a discount of about US15c/lb against equivalent imported beef. This discount is not as big as it was last northern hemisphere spring, but it is lower than what was seen in previous periods of lower imports.


Worth noting, also, is the clear shift in port of unloading in the US, caused by major global logistics and shipping upheavals this year. Far more Australian beef is now entering the US via east coast ports, rather than the west coast, where major challenges have been reported in ports like Los Angeles, California.


Last month, more than 76% of Australia's exports into the US went the long way into the market, via ports on the east coast.


Other key Australian export markets also struggled last month. Japan took 18,769 tonnes of the country's beef, down about 12% on the previous month, and 3,600 tonnes or 16% lower than October last year.


For the ten months year-to-date, Japanese buyers have taken almost 197,000 tonnes, some 11% lower than the same period last year. Greater imports from the US have filled some of that gap.


South Korea snuck ahead of the US in trade volumes last month, accounting for 14,900 tonnes of Australian beef. That compares with around 13,700 tonnes the previous month, and a similar figure this time last year.


South Korea remains one of Australia's most stable markets, year on year, with ten-month trade to the end of October reaching 131,600 tonnes, up 2.8% on last year.


Meanwhile, beef to China continued at a subdued pace last month, reaching 12,609 tonnes, mostly frozen. This volume was much the same as in September. For the year to date, the country has accounted for 121,595 tonnes, down about 47,000 tonnes or 28% from the same period last year.


- Beef Central

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