Australian beef exports continue at record pace

AUSTRALIA - Australian beef and veal exports have started 2007 at a record pace, with shipments for the first four months of the year totalling 300,168 tonnes swt (Department of Agriculture, Fisheries and Forestry).
calendar icon 4 May 2007
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Despite the stronger A$ and weakening demand in some overseas markets, export volumes from January to April were up 9% on 2006, with much of the increase a result of rising cattle supplies due to deteriorating seasonal conditions.

Demand from Japan, Korea and the US has been reportedly slowing in recent months, with the stronger A$ affecting export returns and Australia’s price competitiveness against domestic beef in overseas markets. In Korea, the expectation of increased US supplies and lower beef prices has resulted in decreased demand, with Australian exports for April falling 46% on March and 18% on last year, to 7,480 tonnes swt – the lowest monthly volume since January 2006.

MLA had forecast earlier in the year that Australian beef exports to Korea in 2007 would be down 27% on 2006 levels, to 110,000 tonnes swt, based on an assumption of 80,000 tonnes swt of US beef also entering the market. For the first four months of the year, Australian shipments were up 40%, to a record 49,436 tonnes swt, with the likelihood of meeting, or indeed surpassing, the initial forecast of 110,000 tonnes dependent upon the timing of the full re-entry of US beef, along with a rebound in end user demand.

Despite demand for imported manufacturing beef in the US remaining sluggish, with high US cow kills and the strong A$, exports for April surged 20% higher on last year, to 27,110 tonnes swt. Contributing to the increase for the month was higher Australian beef production, along with continued strong demand for Australian chilled beef. Exports to the US so far in 2007 are up 4% on 2006, to a four-year high of 95,990 tonnes swt.

Export prices and seasonal conditions will continue to have a large influence on Australian shipments to the US over the remainder of the year, with further falls in export returns for manufacturing beef possibly seeing product diverted to more lucrative markets. Further, a significant improvement in seasonal conditions across eastern Australia should reduce cow turnoff rates and tighten available cow beef supplies.

Beef shipments to Japan for the first four months of 2007 were up 1.5% on the same period in 2006, to 126,147 tonnes swt - the second highest level on record behind 2005 (136,746 tonnes swt).

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