Kay’s Cuts: Australia needs beef export recovery

Steve Kay, 20/10/2022

A monthly column written for Beef Central by US cattle and beef market commentator, Steve Kay, publisher of US Cattle Buyers’ Weekly





FOR a country that exports up to 70 percent of all the beef it produces, Australia desperately needs a recovery in its beef exports.

I’m sure all in the industry were disappointed that September exports totaled only 70,295 tonnes, which was down 12,000t or 13pc from August.

Exports are the lifeblood of every major beef-producing country, even in the US where, in contrast to Australia, only 15pc of total production on average is exported. That 15pc is vital, however, because it adds significant value to slaughter cattle, especially grainfed steers and heifers.

In fact, US exports added more than US$476 to the value of each fed steer and heifer in July and US$438 in August. The letter value was down 7pc from a year ago, but the January-August average was still up 23pc to US$471. Exports January through August accounted for 15.5pc of all US beef cuts produced and 13.3pc of all beef produced.

These are the numbers that emerged for the first eight months of this year when the US Meat Export Federation compiled the data for August exports.

From virtually no beef export sales in the 1970s, the US in 2021 exported 1.44 million tonnes of beef and beef variety meat (offals) worth US$10.58 billion.

Exports last year per head of fed slaughter equated to a record US$407, up a whopping 35pc from 2020. But the beef export juggernaut has gathered even more pace this year, hence the increase in per head value versus all of last year. Exports so far this year have topped US$1 billion in seven months out of eight and were likely to do so again in September.

August beef exports totaled 134,000t, up 1pc year-over-year and the second largest volume on record. trailing only May 2022, says the US Meat Exporters Federation.

Export value was just under US$1.04b, slightly below the then-record total achieved in August 2021, which was the first time that monthly exports topped the US$1 billion mark.

For the first eight months of 2022, USA beef exports increased 5pc from a year ago to 1.004 million tonnes, valued at US$8.23 billion, a remarkable 24pc above last year’s record pace. US pork exports also rebounded in August, reaching 226,293t, up slightly from a year ago and the largest since November 2021, while export value climbed 4pc to US$659m.

Currency and other headwinds

“We speak often about the importance of developing a wide range of markets for US red meat, and the August export results are a great illustration of that,” said USMEF President and CEO Dan Halstrom.

“Exports face significant headwinds in some key destinations, with weakened currencies topping the list. But the emphasis on broad-based growth really pays dividends in these situations, allowing the overall export picture to remain very positive. I also cannot say enough about the loyalty of our international customers, many of whom have diminished purchasing power but continue to show a strong preference for US red meat.”

Following a strong July performance, US beef exports to Japan took a step back in August at 26,000t, down 18pc from a year ago. Export value was US$189m, down 19pc. This included a sharp decline in beef variety meat exports (mainly tongues and skirts), which fell 46pc to 3964t.

(Editor’s note: for readers seeking to make comparisons with Australia’s recent export performance to Japan and other markets, it’s worth noting that Australian volume reports are for muscle-meat only – not including offals).

But through August, Japan remained the leading volume destination for US beef exports at 212,000t, down 2pc from a year ago, while export value increased 11pc to US$1.67 billion.

Japan is the leading value destination for US beef variety meat exports, and while January-August exports were down 8pc in volume (37,500t), export value climbed 28pc above last year’s record pace at US $379m.

Japan’s ascendance to being a top export market for US beef is remarkable when one considers that until 1978, the US exported little beef to Japan, usually less than 10,000t per year.

However, the Strauss-Ushiba Understanding of 1978 between the US and Japan allowed for an increase in the quota for high quality grainfed beef from 16,800t in 1978 to 30,800t in 1983.

By 2012, the US exported 153,000t of beef products there worth US$1.03 billion. Yet these numbers more than doubled by 2021, when export volumes hit 320,735 mt worth US$2.376 billion.

It was especially fitting therefore that leaders representing the US red meat industry recently travelled to Tokyo to commemorate the 45th anniversary of the inaugural USMEF office, which opened in Tokyo in 1977.

Japan has consistently been a top customer and is the leading international market for US red meat, purchasing nearly US$4.1b worth in 2021, says USMEF.

Through July 2022, US red meat exports to Japan reached nearly US$2.7b. No other country can come close to that total.


  • Next month’s column: What happens to US export beef supply (and Australia’s prospects) when the current extreme drought cycle in the US breaks?








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