Live cattle export volumes are set to bottom out in 2013, before shipments slowly rebuild in line with projected demand growth in the medium term, according to industry forecasts.

The main focus for exporters in 2013 will to bed down the industry’s new welfare assurance program, the mandatory Exporter Supply Chain Assurance System now in place across all markets, and to focus on finding other customers to reduce the northern industry’s heavy reliance on the large but unpredictable Indonesian market.

The trade has enjoyed some success in finding alternative markets for northern cattle in the past 12 months, according to data contained in Meat & Livestock Australia’s industry projections report for 2013, released yesterday.

Estimates of 2012 export totals  (final figures are still a month or two away) suggest exporters were able to increase shipments of northern cattle to markets away from Indonesia by about 70,000 head compared to 2011 levels.

Exports to Malaysia increased by 21,213 head last year (to 33,500 head), to the Philippines by 11,292 head (to 33,000 head), to the Middle East/Africa (excluding figures for Turkey) by 35,733 head (to 113,000 head, or 160,000 head including Turkey), and to ‘other’ markets (principally Brunei) by 2978 head (to 18,000 head).

While these levels are well short of filling the void left in both volume and value terms by Indonesia’s gradual import cutbacks, they have provided an important source of cash flow and stock sales for those producers able to supply orders in the wake of the Indonesian market downturn.

Underlining how valuable the Indonesian market remains to northern producers, MLA emphasises the point that despite the recent increases in orders to the Philippines and Malaysia, both are price sensitive markets, and will continue to absorb heavier out-of-spec cattle whilst domestic prices remain lower.

Shipments to Russia, primarily beef breeding cattle from southern Australia, increased by 8500 head in the past 12 months to 39,000 head in 2012.

Exports to the market of Turkey, which also cannot take cattle from areas north of the bluetongue virus line (which runs from Broome in the west through Alice Springs, Longreach and down into northern NSW in the east) dipped by 9500 head in the past 12 months to 47,000 head.

For 2013, MLA forecasts Australian live cattle exports will total around 550,000 head, down by 14pc on the 640,000 head exported last year.

This year’s exports are expected to comprise around 480,000 feeder cattle and 70,000 breeder beef and dairy cattle.

Exports to Indonesia are set to total just 267,000 head this year, down from 772,868 head in 2009, as the Indonesian Government continues to reduce import quota allocations in line with its aspirations to supply 90pc of the country’s beef requirements from locally produced beef in 2014.

Despite the small growth achieved in ‘other markets’ last year, in volume terms at least, MLA is not forecasting significant increases this year as exporters continue to work on rebuilding trade under the ESCAS obligations.

Exports to the Philippines are expected to increase slightly by 6pc to 35,000 head, Malaysia is tipped to come back by around 10pc to 30,000 head, Middle East/Africa is forecast to recede by 44pc to 90,000 head and other markets (Russia, Brunei and Mexico) are set to increase by 19pc to 68,000 head.

MLA says the past two very wet monsoons and strong young cattle prices have helped to offset some of the production impact of the reduced flow of cattle to Indonesia.

The better seasonal conditions through to the first half of 2012 gave producers the option of retaining of additional cattle, while high young cattle prices helped to partly offset the high transport costs required to deliver northern cattle to domestic markets or processors.

However MLA cautions that a below average finish to the current wet season could place significant pressure on feed supplies, especially with many regions reportedly carrying higher numbers – the consequence of the herd build-up and restricted cattle movements since the start of the record wet run in 2010and Indonesian slowdown.

“Such a scenario could see additional northern cattle looking for outlets in eastern Queensland and southern Australian markets into the second half of 2013, and consequently, pressuring cattle prices across the board.”

Over the medium term MLA estimates live cattle shipments will increase from a low point of 550,000 head this year to around 700,000 head by 2017 – but acknowledges that much depends on access arrangements for Australian cattle into Indonesia.