THE decline in beef exports to the US in November served to illustrate the impact that smaller customer countries that normally appear in the ‘other’ column of trade statistics, are starting to have on export trade flows.
As highlighted in a Beef Central summary on Tuesday, DAFF’s beef export report for November showed Australia’s trade into the US reached only 13,325 tonnes for the month, a 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.
New arrivals, like China, for example, took an unheralded 8.9pc of all Australian beef exported in November.
The three charts published here, prepared for MLA by US-based Steiner Consulting, illustrate the dramatic transition that has taken place in the past decade with regard to Australian exports to the US, and Japanese and ‘other’ markets.
Back in 2004 and 2005, Japan and the US represented as much as 80pc of Australia’s total beef export business. Since then, there has been significant diversification in trade.
Last year, the US market accounted for about 18pc of Australian beef exports, while Japan accounted for another 37pc of the business. The other 45pc went to other Asian markets (principally Korea, Indonesia, Taiwan) as well as Russia and the Middle East.
So far this year, Australian shipments to the US market have averaged about 23pc of overall Australian exports; shipments to Japan have been 33pc, while other markets took about 44pc of exports.
“The question is, what happens next year,” Steiner Consulting said.
“If the US is able to increase its exports to Japan (assuming the current 20-month cattle age limit is lifted), then we could see a bit more Australian beef come to the US,” Steiner said.
“But don't forget those other markets. Indeed, some US market participants indicate that part of the reason for the sharp drop in shipments during November had to do with the fact that US end-users were so reluctant in September and October to commit to any significant out-front purchases of Australian beef.”
As a result, the US share of Australian November shipments reached only 14.8pc.
The takeaway was that the US market would continue to compete with other markets for Australian and New Zealand beef –but in order to purchase a larger share, higher prices would likely be required.
Just how high will 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.
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