BEEF exports for the first month of the new fiscal year have set a new monthly record at more than 106,000 tonnes, surpassing the previous drought cattle turnoff-fuelled record set in May by around 3000t.
The July total of 106,184t takes Australia’s total calendar year export volume to 606,000t, up 14 percent on this time last year, and well on track to break one million tonnes by year’s end.
MLA’s recent half-year Projections Update has likely total 2013 exports at exactly one million tonnes (shipped weight), up 3.8pc from last year (964,000t).
Monthly volumes to a number of export markets were the highest for the year during July, and in several cases, the highest on record.
A big factor in the July surge, beyond the sustained near-record high beef kills due to drought pressure across eastern states, was the recent easing of the A$, with the currency slipping into the US80’s at a three-year low yesterday of US89.44c. That’s back more than 15pc from its high point earlier this year of 105.42c.
The currency softening has definitely had an impact on Australia’s key markets of Japan, the US and Korea, where July trade has all grown.
Exports to Japan during July improved, after what has been a sluggish past couple of years, with shipments totalling 31,700t, up 25pc from June (which was impacted by the threat of Japan’s Safeguard tariff being triggered), and 2pc higher than July last year. In fact shipments during July reached their highest point since November 2011.
While anecdotal reports suggest market sentiment in Korea is subdued, shipments during July reached 12,800t, up 34pc year-on-year, and taking the total for the first seven months of this year 25pc higher than for the same period in 2012. The increased Australian shipments so far in 2013 come despite the lower tariff enjoyed by US beef.
China surges again
China again surged to a new monthly record, reaching 15,000t during July, surpassing the previous highs by 22pc, or 2745t. This time last year the sleeping giant of China was just beginning to stir as a future beef customer for Australia, taking what was then a record 1065t for the month.
It’s easy to forget just how recent the whole China beef trade phenomenon is.
We’ve dug back into Beef Central’s archives to try to identify when China first started coming on our radar as a serious beef player.
We made an incidental, passing reference in an early July (2012) summary of Australia’s 2011-12 fiscal year export performance, remarking that “trade to China for the year was up 8pc to 7736 tonnes,” a truly insignificant amount in the context of where the market has gone since.
It wasn’t until our September 2012 monthly exports report that we really stated to see some encouraging signs. Out of historical interest, here’s what we wrote at the time:
“After decades of expectation and much-discussed potential, the China market appears to be gaining some real traction as a destination for Australian beef exports.
For the month of September (2012), China was responsible for 4060t, a 158pc increase over the August shipments of 1572t. The comparison with September last year is even greater, representing a 366pc increase from just 871t consigned.
Add the trade to Hong Kong to the China figure (some grey trade leakage occurs) and total volume last month reached almost 4600t.
Year to date, China has now taken 9746t of Australian beef, close to double the volume of trade for the same period on 2011. For the entire 2010 calendar year, exports reached only 5600t.
It is too early to tell yet whether the current lift in trade will be sustained, but major export processors this week remarked on the buyer interest currently emerging out of the country.”
For the 2013 calendar year-to-date, China has now taken 77,486t of Australian beef, and should easily smash the 120,000t mark by year’s end. Year-to-date performance ranks it in third place among Australia’s export customers, exceeded only by the US and Japan, and incredibly, about 3000t larger than South Korea in volume.
Even three or four months ago, that achievement would have seemed unfathomable. By this time a year ago, China had taken just 4113t of Australian beef for the calendar year.
US, other markets
Trade into the US last month reached 17,700t, a solid 10pc rise from June (16,100t), and a 3.5pc rise from trade seen in July last year.
See Beef Central’s recent summary of growing demand and price for imported lean grinding beef into the US, "Positive signs in US grinding beef prices," click here.
Year-to-date, however, the US has taken 118,000t of Australian beef, a big 12.6pc drop from the same period a year ago (135,000t), due mostly to alternate markets like China and the Middle East ‘out-gunning’ US buyers on price. Currency movements and cross rates have also helped, as has the bans on US beef in markets like Russia and parts of the Middle because of ractopamine.
Partly for the above reasons, Australian shipments to the Middle East region during July were the highest monthly volume on record, reaching 6915t, breaking the previous record by 11pc. A month earlier, trade to the region was about 5200t, and this time last year, just 2213t.
Total trade to the EU for July reached 2041t, dramatically higher than this time last year (1330t).
Russia and the former Soviet states took 3071t last month, a 30pc rose over June and a similar amount above this time last year.
Taiwan took 3588t on July, about the same as a year ago; The Philippines 2319t, also similar; Indonesia continues to be constricted by trade access woes associated with the country’s self-sufficiency effort, taking 3400t, a little better than the same month last year.