December 15, 2003

 

 

High Australian Dollar Cause Slump in Live Cattle Exports

 

The high Australian dollar is quickly claiming the country's beef and live export markets.

 

Newly released figures from Meat and Livestock Australia (MLA) show live cattle exports in October slumped 36%, largely attributed to the stronger dollar.

 

And beef exports are also being hit. Last month, exports fall 11% although they have held up remarkably well to the United States.

 

The dollar hit US74 cents this week, driven in part by Australia's latest interest rate hike and low rates in the US.

 

The National Farmers' Federation has estimated the 30 per cent appreciation in the dollar over the past 12 months has cost farmers around A$3.3 billion (US$2.44 million).

 

MLA said live cattle sales to Indonesia, Australia's biggest market, had dropped 47% and suffered their fifth consecutive monthly fall.

 

It said the stronger dollar against the Indonesian rupiah was behind the large fall in exports.

 

"The driving force behind the declining exports has been the steady appreciation of the Australian dollar against the rupiah combined with the current high cattle prices," it said.

 

Exports of live cattle to Malaysia and the Philippines increased slightly, while sales of live dairy cattle to China remain strong.

 

On the beef front, the big fall has been to Australia's third biggest market, South Korea.

 

Sales to South Korea are down 52% on the same period last year, while sales to Canada have dropped 85% to just 767 tons.

 

Despite the strong dollar, beef sales have actually climbed into the US.

 

During November, exports of Australian beef to the US hit a record high of 35,290 tons.

 

High domestic prices in the US are driving the demand for Australian beef.

 

"The prospect of high export returns from the US has seen beef that would have otherwise been sent to other markets redirected into the US," the MLA said.

 

Sales during November to the US made up 49.1% of total exports, the second highest proportion on record.

 

Australia has now filled 88% of its 378,000-ton quota of beef into the US market.

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