Record Fiscal Year Beef Export Returns

AUSTRALIA - The fiscal year value of Australia’s beef and veal exports has exceeded the A$5 billion mark for the first time.
calendar icon 26 August 2009
clock icon 3 minute read
Meat & Livestock Australia

According to the Meat and Livestock Australia, export returns for 2008-09 increased 15% on the previous year, to A$5.06 billion, surpassing the previous record of A$4.9 billion from 2006-07 (Australian Bureau of Statistics and Global Trade Atlas). Over the same period, the volume of exports increased by 4% to total 967,729 tonnes swt.

Very strong returns during the second half of 2008, along with a lower A$, masked the very difficult trade conditions brought about by the global economic and financial turmoil over the first half of 2009. The increase in export returns for 2008-09 were not reflected in cattle prices, even with the lower A$, as processors struggled with very difficult trade conditions, particularly over the June quarter 2009. A lack of competition between net importing nations kept export prices constrained, with consumer demand in almost all major trading partners hit by the global economic and financial turmoil. Adding to the impact on cattle prices were lower hide and co-product returns.

In a refection of the tumultuous year for Australian beef exports, the value of shipments for July to December 2008 increased 24% year-on-year, while exports over the first six months of 2009 only increased 4%, despite the A$ averaging much lower. Indeed, the extent of the difficult trading conditions was most pronounced in the final three months of the 2008-09 fiscal year, with export returns declining 8-10% year-on-year in April to June, as export prices declined and the A$ appreciated.

Despite the recession, falling imported beef prices and sluggish consumer demand, Japan easily maintained its position as Australia most lucrative beef and veal export destination in 2008-09. Shipments for the past year were valued at A$2.1 billion – up 13% on the previous year, but still 14% below the record A$2.4 billion in 2004-05. Assisting the rise in export returns to Japan for the year was a 25% decline in the value of the A$ against the Japanese yen, averaging 74.3 yen, compared to 98.8 yen in 2007-08. Also, stronger export beef returns during July to October 2008 helped to offset the lower prices throughout the first half of 2009.

While the value of Australia’s beef and veal exports to the US increased 30% year-on-year, to A$1.2 billion. Constrained volumes during the second half of 2008 had export returns for July to December 2008 up 17% year-on-year, compared to a 47% jump in returns during the first six months of 2009. Helping the surge in export returns in 2009 was the lower A$, robust demand for manufacturing beef and the larger volumes shipped.

Impacted by the financial crisis, depreciation of the Korean won, return of US beef, lower beef prices and constrained shipments, Australian beef export returns to Korea for 2008-09 declined 22% year-on-year, to A$596 million.

Strong demand for Australian beef from South East Asia saw export returns for 2008-09 up significantly, especially to Indonesia, which jumped 40% on the previous year, to a record A$140 million. Exports values to Taiwan increased 36% year-on-year, to A$145 million, China 35% to A$24 million, while returns from Hong Kong (A$48 million), Singapore (A$54 million), the Philippines (A$59 million), increased 46%, 10% and 146%, respectively.

Reflecting the major surge in Australian beef exports to Russia in 2008, and subsequent contraction in 2009, exports returns to Russia for 2008-09 reached A$175 million – with 75% of returns registered between July and October 2008.

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