Trade

Collapse in volume to US concerning trend in November beef exports

Jon Condon, December 3, 2020

AUSTRALIA’S monthly beef exports continued to track lower in November, in line with recent lower rates of cattle slaughter – but the key feature was a collapse in trade into the US market.

Last month saw total exports to US east and west coast ports reach just 9596 tonnes – the lowest monthly shipment volume seen from Australia since January 2011.

Trade to the US was down 34pc last month from an already-low October volume of 14,500t.

So what caused the major slump in exports to the US seen back in January 2011?

Firstly, January is always the quietest month in the annual beef export cycle out of Australia, as many export plants close for holidays.

But the 2011 year holds special significance for Australia. The slump in trade early that year was due to one overwhelming factor – Cyclone Yasi, which tore along the Queensland and NSW coasts. Damage and flooding caused the closure of the Port of Brisbane for ten days – the largest beef export port in Australia, by a considerable margin – as well as prolonged closures of meat processing plants from Innisfail to northern NSW. Roads and rail lines were cut, further limiting access to slaughter stock, until well into March in some regions.

But there was no cyclone to explain the alarming drop in exports to the US last month.

In a separate article, we will look into what’s caused the sharp drop in trade into the US last month.

Overall beef trade down

Overall, Australia’s beef trade to all markets last month reached 79,947 tonnes, down another 1.7pc on October figures, and 23pc lower than November last year, when large parts of eastern Australia were still in drought.

For the calendar year to date, exports to all markets have reached 954,366t, down 14.3pc on the same 11 months last year. It suggests that full year beef exports this year will just creep over the one million tonnes mark – possibly lower than the recent low-points seen during herd rebuilding in 2016 and 2017, when annual shipped weight volume was around 1.015 million tonnes.

While Australia’s overall export trade was down last month, the void left by lower US shipments in November was largely absorbed by other core export customers.

Trade to Japan was sharply higher at 25,422 tonnes, up 13.6pc on October figures and 7pc higher than November last year.

Trade with Japan for the 11 months ended November has passed 246,700t, down 7pc on the same period last year, in line with much lower beef production out of Australia.

South Korea also absorbed some of the void left by declining US trade last month, taking 16,559t in November, up 20pc from shipments in October, and up 27pc on November last year.

A clear factor in last month’s sharp rise to Korea was importers racing to build stocks in anticipation of Australia’s triggering of Korea’s Safeguard tariff last week (discussed in this earlier story), which will see a sharp rise in tariffs on Australian beef for the remainder of the trading year.

Year to date, Korea has taken 144,459t of chilled and frozen Australian beef, just slightly short of last year’s 147,000t.

China again fills third place in volume rankings for Australian beef exports in November, after dominating the league-table for much of the past two years. China took just 13,064t of mostly frozen Australian beef in November, up a few hundred tonnes on already-low October trade, but a dramatic 21,200t (62pc) drop on trade seen this time last year.

Growing trade and diplomatic tensions between Australia and China have left a sense of unease across the export trade, but the fact is last month’s trade volume was only a little over one third of what it was this time last year, suggesting much of the adjustment and trade impact has already occurred.

Incredibly, all this leaves the United States as Australia’s fourth largest beef export market, based on monthly shipments during November, discussed above (9596t). It’s possibly the first time since the 1950s that the US has ranked outside the top three customers for monthly beef exports out of Australia.

Other markets

In other markets, Indonesia took 2970t of Australian beef last month, much the same as October, but 38pc lower than November last year. Year-to-date trade has passed 44,600t, down from 54,700t for the same period last year.

Trade into the EU continues to labour under the weight of COVID (much of Australia’s export beef is used in the food service sector, still hard-hit across Europe due to close-downs). November trade reached just 767t, a slight rise from a record low 658t a month earlier, and down from 1270t this time last year.

Total Middle East shipments reached 2803t last month, a 15pc decline on October, but 22pc better than November last year. Strong price competition from South American exports is a key factor in the long-term decline in trade into the Middle East.

 

  • Beef Central will provide its usual wrap of full calendar year exports in early January, during our annual Christmas/New Year holiday break.

 

 

 

 

 

 

 

 

 

 

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