Trade

June beef exports surge, reaching 94,009t, with the US leading the way

Jon Condon, 05/07/2023

 

THERE was a sharp rise in Australia’s June beef exports, falling into line with higher levels of slaughter heading into winter.

Total exports to all markets last month reached just over 94,000t, up about 3.3 percent on the previous month, and 14,000t or 18 percent higher compared with June last year, when post-drought herd rebuilding was still in play.

The momentum being seen in beef production this year is also reflected in full six-month January-to-June figures, which show export volume has reached 478,379t – up almost 80,000t or 20pc on the same period last year.

Biggest proportional increase was seen in frozen exports, reflecting the greater numbers of cull cows now being cycled as the drought-driven herd recovery has come to an end.

Unfortunately we are unable to report on full 2022-23 financial year trade volume to June 30, as the spreadsheet uploaded by DAFF yesterday is corrupted. We have bought the problem to the department’s attention, and will add the data to this report once DAFF has addressed the problem.

Stronger six months ahead

MLA’s recent mid-year 2023 industry projections have been amended upwards, with beef production forecast to strongly increase in the back half of this year as a result of higher slaughter cattle supply, improvement in processing capacity and historically elevated carcase weights.

National slaughter for calendar 2023 is now forecast to reach 6.95 million head, a 5pc upwards revision, representing 325,000 head, on MLA’s original January forecast. That in turn has pushed expectations for total beef production and beef exports higher.

Total beef production for export and domestic use is now expected to hit 2.2 million tonnes, up by 100,000t from 2.1mt in January. Exports are also forecast higher – now 1.09mt shipped weight (1.599mt, carcase weight), versus 1.014mt/1.49mt at the start of the year.

Processing labour is now the key limiting pinch-point in terms of further advances in export volume, in the face of a growing supply of slaughter-ready cattle (see Tuesday’s weekly kill report.)

Most markets show lift in June volume, led by US

Most of Australia’s significant beef export markets took larger volume during June.

In a significant development reflecting the changing beef production cycle in the United States, the US re-established itself as Australia’s single largest beef market by volume in June, taking 20,585t of beef for the month – almost double the trade seen this time last year. Almost three quarters of that was in frozen form, mostly manufacturing beef.

The past two months have been easily the strongest for trade into the US since 2021.

For the calendar year to date, the US has now taken 89,040t of Australian beef – more than 30,000t higher than the same period last year, but still unusually low by historical trade standards. But the US is likely to bid business away from other import competitors in the months to come, as US beef production continues to slow, traders suggest.

China continued to purchase Australian beef with vigour last month, taking 19,583t of Australian beef – virtually the same as the previous month, but 39pc higher than June last year.

For the calendar year to date, China has now taken just short of 99,000t, almost 20,000t or 25pc higher than last year. Part of the reason for the jump was the impact from Brazil’s earlier temporary suspension in trade into China after the detection of an atypical case of BSE in March. Australian beef has been used to partially fill the void, in the absence of much larger Brazilian shipments until May.

Japan finished close to China in terms of export volume last month, taking 18,831t of Australian beef – almost half of which was in chilled form. That was down a little on the previous month, and 3500t or 16pc behind June last year. For the first six months of trade in 2023, volume to Japan has reached 102,493t, about 6000t or 2pc behind last year.

South Korea continues to fill an important and very stable role for Australian export beef, taking 14,486t last month, down about 7pc on May exports, but similar to this time last year. Calendar year to date, Korean volume has reached 87,119t, up 16,000t or 22pc on last year’s equivalent trade.

Among smaller and emerging markets, trade into Indonesia continued to grow last month, reaching 5829t, up another 7pc on the pervious month and 26pc better than this time last year. Six-month trade has hit 31,300t, up a dramatic 75pc on last year.

The Middle East region including seven customer countries was steady last month at 2352t, much the same as May but a little behind this time last year.

UK trade off to a slow start

June represented the first month of trade in Australian beef into the United Kingdom following the activation of the new Free Trade Agreement, which now sees exports arrive tariff-free.

While stocks were evidently run-down during May to take advantage of the tariff relief, trade during June was quiet, to say the least. Just 273 tonnes of Australian beef was shipped – virtually all chilled, boneless. While that represented a rise from 140 tonnes the month before (tariff impact clearly reflected in that), it still represents only a drop in the bucket, both from an importing and exporting perspective.

Calendar year trade to date to the UK has reached just 671 tonnes, but nobody in the trade is expecting Australia’s export beef business into the UK to explode overnight.

Slow but steady growth is the likely direction, with the prospect of a little more high-end chilled product like Wagyu likely to make an appearance under the new tariff-free regime, later this year.

 

 

 

 

 

 

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Comments

  1. Tim Burvill, 05/07/2023

    Lots of positive signs starting to occur. The long awaited USA Beef demand looks to have begun, and China back into the market in a big way. Coupled with new abattoir openings and an easing of labour shortages, it looks like the whole industry might be in for a good second half of 2023.

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