Australia

Low domestic supply impacted Australian beef exports

Beef

In August, weekly slaughter figures for eastern cattle averaged 106,000 head, well back on the five-year average (2015–19) of 139,000 head per week, says MLA.

Posted on Sep 11 ,11:10

Low domestic supply impacted Australian beef exports

A contraction in the national cattle herd of Australia is starting to have an impact on volumes of beef exported, according to MLA's latest report. Exports of beef totalled 78,000 tonnes swt in August, the lowest monthly total since January last year. Relative to last August, volumes were back 27%, while year-to-August beef exports are now back 9% on 2019, with constricting supply really starting to take hold.
The top destinations in August were Japan (19,700 tonnes swt), the United States (18,200 tonnes swt) and South Korea (13,000 tonnes swt). For the first eight months of the year, total exports of chilled beef are back just 1% on 2019 levels (relative to a decline of 12% for frozen beef), with exports to the United States, China and South Korea all experiencing good growth. As the herd rebuild gains momentum, the proportion of cows to total cattle slaughter will continue to fall, which should result in a greater percentage of beef being exported as chilled prime cuts rather than as frozen manufacturing mince.

While the first few months of 2020 saw strong demand from China for chilled beef, as affluent consumers sought high-quality product for cooking at home, beef volumes to China have been impacted by the temporary suspension of five Australian establishments which would normally be significant suppliers for the market.

Interestingly, it appears that much of the product which would likely have been destinated for China is being re-directed towards South Korea and the United States. Relative to total Australian beef exports, South Korea accounted for 17% in August, up from 12% in August 2019, while the United States accounted for 23%, up from 19% last August. While China certainly remains a critical market, this ability to pivot and distribute beef to other high-value markets remains a key component, underpinning the stability of the Australian export industry.

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