Trade

June and fiscal year beef exports continue at subdued pace

Jon Condon, 04/07/2017

THE slow pace of beef exports that has characterised the first half of 2017 continued during June, when consignments to all export destinations reached just 94,442 tonnes.

While comparisons with June last year are now starting to lose significance, because of the rapid decline in beef kills and subsequent export volumes that happened from the middle of last year, one only has to look back a year earlier to June 2015 to see the extent of export deterioration since the drought-driven herd liquidation period.

June 2015 accounted for more than 118,000t of export beef (and July 121,000t) – two of the largest monthly beef shipments from Australia on record.

That represents a 23,000t deficit (20pc) between 2015 performance and June just past.

Being the end of the financial year on Friday, the occasion presents an opportunity to ‘milestone’ some recent beef export performance. For those who are put off by an abundance of figures – turn away now. For the rest of you, here’s some trade statistics that may be of interest.

For the 2016-17 fiscal year just completed, Australian beef exports reached almost 958,300t – down 17.9pc from the 1.167 million tonnes the year before.

For the first six months of calendar 2017 ended June 30, exports totalled just over 473,00t, down 10.5pc or 55,000t from last year’s equivalent period of 528,600t.

For the back half of 2017, its expected that total exports to be about the same, or a little lower than the July-December period last year, suggesting the worst of the declines in export volumes may be behind us.

Here’s a brief market-by-market snapshot of recent export performance:

Japan:

June exports to Australia’s largest export market by volume and value reached 27,400t, up about 4pc from May, and 8pc higher than June last year. Calendar year-to-date exports have reached almost 140,000t, compared with 125,000t this time last year (+12pc); while 2016-17 fiscal year trade reached 278,000t, up 3.7pc.

US:

Exports for June reached 24,500t, up 6.5pc from the previous month, and up 7pc from June last year. Volume for the six months ended June have passed 113,000t – a substantial 33,000t, or 22pc decline from the previous corresponding period.

Even worse is the full financial year export result for 2016-17, of 208,300t – a dramatic 126,000t or 37pc decline on shipments during the previous 2015-16 year, as Australian production has rapidly declined, at the same time that US production has gained considerable momentum.

Korea:

Third largest export market South Korea continues to perform well for Australia, taking 14,000t of chilled and frozen beef in June, up 12pc from May and much the same as this time a year ago. Calendar year-to-date shipments have reached 67,600t, still well short of the 85,000t consigned for the same six months in 2016. Full fiscal year shipments have reached 161,600t, back 7pc on the previous 2015-16 year, as the US continues to gain momentum in exports, particularly popular single cuts like shortrib, following its herd rebuilding phase.

Domestic Korean beef supplies remain very tight, as the local Hanwoo beef herd continues to decline.

China:

Shipments to China last month reached 8768t, about 1000t below May, and roughly the same as this time last year, as Brazil continues to penetrate the market with cheaper imported beef.

Calendar year-to-date, volume has just topped 51,000t, compared with 47,600t a year earlier. For the 12-months ended June 30, exports reached 97,000t, down from 128,000t the previous year, due to competitive pressure from Brazil and limited Australian beef supply.

Indonesia:

Trade into Indonesia last month reached 4100t, down by 33pc from May, and back 47pc from June last year, due to mounting pressure from cheap Indian buffalo meat. Calendar year to date, exports have reached 22,400t, back about 32pc on the previous year, while full fiscal year trade at 50,500t was back 7pc on the 2015-16 year.

Middle East:

Trade to the Middle East last month reached 2440t, down 22pc on May, but up 10c on June last year. For the six-months ended June 30, trade reached 14,400t, back 15pc year-on-year. Full fiscal year trade reached 28,100t, back 35pc on the previous corresponding period.

European Union:

June exports to EU destinations reached 1732t, up 10pc from May, but 34pc behind this time last year. The 2017 year to date has produced trade volume of 8536t, about two thirds of the volume seen in 2016.

Full fiscal year to June 30 trade totalled 17,100t, compared with almost 23,000t a year earlier.

 

 

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