The continued emergence of China as a customer for Australian beef, and a big slide in volumes into the US were some of the important aspects to note in the latest monthly export shipment records released this morning.

Australian exports of beef and veal to all destinations for November reached 90,042 tonnes, according to Department of Agriculture, Forestry and Fisheries shipment data.

While that represented a sizeable 4.4 percent decline on October’s performance, it’s worth noting that October was a particularly active month for exports, leaping 12pc year on year, and a massive 18pc rise on September’s export trade. The October figure was in fact Australia’s third highest export volume on record, according to trade figures.

November’s shipments just completed were, in comparison, a little stronger than the same month last year, rising 295t.

Calendar year to date, Australian beef exports have reached 877,549t, about 10,000t better than the corresponding period in 2011. The surge in rates of kill over the past three months partly explains that growth.

Big drop in US trade

DAFF’s beef export report today shows Australia’s trade into the US in November reached only a disappointing 13,325 tonnes, a huge 30pc slide from October’s performance above 19,000t, and 17pc below November last year.

Market analysts in the US have put the shift down, in part, to competing countries out-muscling the US on price for Australian manufacturing beef. Imported 90CL prices have gone as high as US218c/lb in recent days.

Spot supplies of Australian beef in the US last week were reported as ‘very light’ and those buyers that were caught short pushed the market higher. The recent tightness in the US market for imported 90CL beef caught some stakeholders by surprise, as indications earlier in the month had suggested November shipments from Australia might reach +17,000t.

Visiting Australia for a series of stakeholder engagements this week, US analyst Len Steiner said the US market would have to continue to compete with other markets for Australian and NZ beef.

In order to purchase a larger share, higher prices would likely be required from US buyers. Just how high would be dictated in part by the availability of US domestic cow meat, but also factors such as exchange rates (which affect exporter returns) and the global economic outlook, he said.

More on the growth of ‘other’ markets as a customer for Australian beef on Beef Central in coming days.

Calendar year-to-date shipments from Australia to the US have now reached 202,000t. That’s a massive 25pc improvement on the same period last year (152,000t) when the US was still in the middle of drought.

Last year’s trade to the US sank to 20-year lows, driven by unfavourable exchange rate, the abundance of domestic US grinding beef available as the US liquidated beef breeding and dairy cows due to drought, and the general decline in beef consumption among US consumers battling tight economic conditions.

Another record for China trade

China has emerged as the surprise packet as an Australian beef export customer during the second half of 2012, registering its third successive monthly shipment record in November.

China took 7955t last month, on top of 7524t in October, and 4060t a month before that.

Still small numbers, granted, in the context of Australia’s larger beef export customers like the US, Japan and Korea, but enough to rank China as Australia’s fourth largest beef export customer for November.

After decades of expectation and much-discussed potential, the China market is currently gaining some real traction as a beef export destination. Compare the latest November figure with the same time last year, when shipments reached just 960t.

Year-to-date, China has now taken 25,225t, compared with 7100t for the same period a year earlier – a 255pc increase – ranking it seventh among all customer countries, just behind Indonesia, but ahead of the Philippines.

The driver behind the big, sudden increase in trade interest out of China appears to be a campaign by authorities to eliminate the so called ‘grey trade’ where illicit beef imports enter the country via neighbours like Vietnam, without paying duties and taxes. Another factor may be importers’ attempts to stockpile for the approaching Chinese New Year (February 10), when meat protein consumption reaches a high point.

Surge into Japan

There was a strong surge in trade volumes into Japan last month, with shipments totalling 27,834t, a 14pc rise on October trade, but still 17pc below November 2011 levels (33,500t).

Year-to-date, Japan has now taken 285,000t of Australian beef, still down 8.7pc on the same period last year (312,000t). That’s due mostly to ongoing weak consumer sentiment and increased competition (perhaps more accurately, anticipated competition) from the US, following age restriction adjustments on US beef likely early next year. This continues to place downward pressure on demand for Australian beef, traders say.

Trade last month to South Korea, Australia’s third largest export market, reached 15,217t, up marginally from October, and a solid 21pc rise from November last year. Trade sources said the kick in exports for the month can be largely attributed to specific cut shortages, uncertainty around US beef supplies and advanced preparations for Lunar Year celebrations in January.

After showing good growth trends a month earlier, the EU market eased in November, registering total trade out of Australia of 1522t, a disappointing 1000t (39pc) decline on October, but still about 500t better, year-on-year.

Year to date EU exports have reached 13,500t, up about 15pc on 2011.

Exports to the Middle East (3057t) went close to the year-high 3085t shipments made in October, and still up 10pc on last year.

Russia continued to disappoint as an emerging customer for Australian beef. The former Soviet States (CIS) accounted for just 1426t last month, another slide from an already low figure of 2500t in October, but a little better than trade in November last year. The CIS is now accepting much larger volumes of beef again out of South America, out-competing Australian frozen beef on price, based on currency movements and market access improvement.

Total trade to Russia this calendar year has now reached 33,600t, down 35pc from the same time in 2011, as South American competitive pressure mounts.

Indonesian beef trade lifted a little in November to 3588t, up about 35pc from October, but still very modest, by the standards seen prior to latest Indonesian Government efforts to restrict trade under its self-sufficiency drive.

As reported on Beef Central last Friday, import permit allocations for 2013 would suggest Indonesian beef trade is only likely to decline further next year.

Taiwan took about 3800t of Australian beef in November, up about 19pc on October trade, and about the same as last year.

Accentuating the current tough going in some export markets has been the high value of the A$, which in recent years has impacted on Australian red meat’s international competitiveness. The A$ averaged US103.9c during November, up about US1c on October, and US3c higher than November’s average value last year.