Beef exports pushed to record levels

Record Australian beef exports are forecast to continue this year as a result of high slaughter levels due to drought conditions, sustained growth in emerging markets and the recent devaluing of the Austalian dollar.

Meat and Livestock Australia's mid-year cattle projections, released today, showed that total Australian beef and veal exports for 2013 were forecast to reach one million tonnes shipped weight - the highest annual total on record.

MLA chief economist Tim McRae said the tough production conditions across the north would continue, while in southern Australia good seasonal conditions going into spring should have a positive impact on the market.

"A positive rainfall outlook for southern Australia for the next three months, combined with recent good winter falls, is expected to contribute to a tighter supply of cattle heading into spring," Mr McRae said. "This will be in stark contrast to conditions for producers across northern Australia, who will continue to face very tough conditions until the onset of the next wet season.

"The development of emerging markets for Australian beef in recent years, most notably China and the Middle East, has helped to buffer tough trading conditions in traditional markets."

Recent depreciation of the A$ and growth in the Middle East and China markets has increased export demand for Australia beef, but also led to declines in volumes to Japan and the US, according to Mr McRae.

Tough trading conditions for Australian beef to Japan have continued, with sluggish consumer demand, currency volatility and increased competition for market share from US product.

Exports to Japan are forecast to total 290,000 tonnes shipped weight for 2013, the lowest annual level since 2003, prior to the restrictions placed on US beef, MLA reports.

Mr McRae said Australia had been able to capitalise on current market access advantages in China and the Middle East.

"China has been the growth market for beef exports as the growing economy, tightening of import regulations and increased consumer demand for imported beef has provided an opportunity for Australian beef to capitalise on - assisted by limited access for US and Brazil beef," he said. "Beef exports to the Middle East have also continued to grow, assisted by the ban of Brazilian beef to Saudi Arabia."

Australian beef exports to Korea are anticipated to be steady for 2013, however volumes will come under pressure into 2014 as the US tariff reduces further as part of the US-Korea free trade agreement.

Live cattle exports are forecast to be 575,000 head in 2013, with any further growth heavily dependent on discussions for improved partnerships between Australia and Indonesia.