For the past twenty years, Australian beef and veal exports have been increasing steadily, assisted by the growing global demand for protein, including beef. However, the form that beef is exported has been trending very differently, largely underpinned by the capacity international markets have to pay premium prices.
During 2013, for instance, Australian beef and veal exports were 1.1 million tonnes swt, up 14% year-on-year, made up of 748,560 tonnes swt frozen grassfed (up 17%), and 89,504 tonnes swt frozen grainfed (up 34%). Chilled grassfed beef shipments, however, increased only slightly (up 5%, to 141,859 tonnes swt) in comparison to the magnitude of frozen shipments, while chilled grainfed actually declined 3% year-on-year, to 119,565 tonnes swt – the lowest volume in ten years.
This was a continuation of a trend that has been occurring for many years, with 83% of the proportion of grainfed shipments in 1994 being chilled, which in 2013 fell to 57% – dropping below 60% for the first time on MLA’s records (dating to 1994).
This overall decline is largely a reflection of the economic environment in Japan over the course of the past two decades. For instance, in 1995, when Japan’s economy was very prosperous, virtually all chilled grainfed beef exports were destined for Japan (104,610 tonnes swt) as well as two thirds of frozen grainfed shipments (16,760 tonnes swt) – making 86% of grainfed shipments to Japan chilled.
Over the succeeding years, as Japanese economic sentiment deteriorated, chilled grainfed proportions declined, even during 2006, the year when grainfed beef export volumes reached their record – the chilled proportion that entered Japan was 72% (137,314 tonnes swt). Similarly, during 2013, chilled grainfed volumes to Japan were 76,098 tonnes swt, making up 65% of the total.
While the chilled volumes to Japan have eased, frozen volumes to Japan and other markets have somewhat offset the decline, with annual grainfed shipments for the past six years approximately 200,000 tonnes swt each year. Although, in terms of value, frozen is much lower than that of chilled.
Furthermore, the declining volume of chilled grainfed beef exports highlights the impact an appreciating A$ has on international demand, with the rise corresponding with the decline in chilled exports.
At the farm gate, the lower volumes of high valued product exported limits the capacity processors have to pass on premium prices through the supply chain.
Source: Meat & Livestock Australia
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