Australian beef exports: High prices pose challenges for major markets

 

JAMIE-LEE OLDFIELD, The Weekly Times (Australia)

March 16, 2017

 

DOMESTIC beef cattle markets have surged over the past 18 months, but globally Australia faces challenges.

 

Before speaking at a Brisbane forum yesterday, Meat and Livestock Australia international markets general manager Michael Finucan said tight supply was putting pressure on our biggest markets.

 

“Coming from a competitor activity view, we have low supply but the US has come back quite aggressively after rebuilding their herd,” he said.

 

“The backbone of our Asian markets is Korea and Japan, where the US has been quite strong and that is making for a challenging environment”

 

While Australia’s beef sales to Japan in 2016 were 13 per cent below the five-year average, the Japan Australia Economic Partnership Agreement means tariffs on Australian beef continue to drop well below those on US product.

 

In Korea, there was an extra 13,266 tonnes shipped weight of beef sent in 2016, made up mainly of frozen grassfed product, but the US tariff is still 5.4 per cent less than Australia’s in 2017.

 

Mr Finucan said there was also a lot competition from Brazil into markets including China, with Australia’s higher beef prices applying pressure.

 

“The China imported beef market has grown by 100,000 tonnes, so Brazil was able to fill the gap because they have the product. Our shortage of supply has seen exports to China drop 20 to 30 per cent, which is because of the high price, where our more mature markets were able to be maintained through that.”

 

“But in the chilled sector and in the higher end grain sector we have really been able to maintain the supply into China.”

 

United States Department of Agriculture deputy chief economist Warren Preston said last week if the US could get access to China it would, with lower value cuts in the US worth more in Asia...

 

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