Australian beef exports for January have had their strongest start for the year since the 2019-20 drought period, when slaughter activity went into overload.

January is traditionally the quietest month of the year for Australian beef exports, with many large northern export plants closed for their holiday break. However shipments to all markets last month reached 75,585 tonnes, the highest January figure seen since 2020, when much of the northern half of Australia was still in serious drought. The January average for the past five years has been 59,000t.

Last month’s result follows on from strong December trade, and comes despite some disruptions caused by the prolonged DP World waterside dispute at major beef shipping ports like Brisbane and Melbourne, and rain disruptions.

Barring public holiday impact, beef processing has had a strong start for the year, with the first four weeks of operations this year reported by the National Livestock Reporting Service averaging almost 88,500 head, 11 percent higher than last year, and 32pc higher than in 2022.

As it did during the back half of 2023, the United States continued to buy strongly in January, taking 20,308t of Australian beef and veal. That was more than double the volume seen in January last year (8953t).

Australia will soon gain a competitive advantage over export rival, Brazil, in the US market.

Source: USDA. Click on image for a larger view

Without a bilateral Free Trade Agreement in place, Brazil exports into the US under the small ‘Other Country’ beef quota, of just 65,000 tonnes. As of 29 January, the ‘Other Country’ 2024 beef quota was already 71.54pc filled. It suggests the quota will be filled within the next month, forcing a full 26.4pc tariff on Brazilian beef exports to the US for the remainder of this year.

Last year, the US’s Other Country quota was filled by 28 March, and the year before that, by May 2. Despite the cost penalty, exports from Brazil to the US have grown sharply in recent years.

At the same time, Australia’s tariff-free export volume to the US has gradually declined over the past four years (see graph). Australia utilised just 29pc of its total US beef quota in 2022, 31pc in 2021, and 55pc last year (2023). The last time the quota was filled was back in 2015.

Most other export beef customer countries also bought strongly during January.

With Golden Week festivities approaching in April, Japanese importers have started the year strongly, taking 16,331t of Australian beef in January, 23pc higher than last year.

Beef trade with China last month reached 14,100t, up about 3500t or 34pc on January last year.

Hampered towards the end of 2023 by the triggering of its Safeguard mechanism under its trade agreement with Australia (see November story), South Korea accounted for 11,682t of Australian beef in January, as the temporary protective tariff was lifted. Las month was some 15pc higher than January last year and 26pc higher than the year before.

Among other markets, trade with Indonesia dropped off dramatically, as exporters contend with delays on the issuance of 2024 import permits on a range of ag commodities including live cattle and beef. January beef shipments reached just 341 tonnes, having taken more than 4000 tonnes in December, and 1900t in January last year.

It was a similar story with Australian beef offals, with just 249t exported to Indonesia in January, compared with 1250t in January last year. Indonesia was easily Australia’s largest edible beef offal market last year, taking 43,000t.

Despite geopolitical troubles for shipping in the Red Sea region, beef shipments to the ten countries comprising the Middle East reached 2212t in January, about 23pc higher than the same time last year.

Total exports to the European Union region reached only 440 tonnes in January, while the United Kingdom accounted for just 237 tonnes.

Strong demand out of Canada for Australian beef seen late last year was not carried through into January exports, with tonnage totalling 1095t. This was still about four times higher than January last year, when Canadian interest in Australian beef was only starting to emerge, but a long way from November-December last year when volume exceeded 2500t.