Beef exports impacted by reduced slaughter
· Beef exports constrained by domestic supply
· Exports of chilled beef growing into the United States, China and South Korea
· Some positive signs for sheepmeat exports in August
Meat & Livestock Australia Limited, 2020
via Mirage - September 10, 2020
It is remarkable to reflect on the myriad of circumstances that have faced Australia’s export industry over the past year. Just twelve months ago, African Swine Fever (ASF) was driving demand from China to unprecedented levels while, amid drought conditions, livestock turnoff was significantly elevated.
At present, demand and supply factors have pivoted sharply due to the impact of COVID-19 and significantly reduced livestock turnoff. In August, weekly slaughter figures for eastern cattle averaged 106,000 head, well back on the five-year average (2015–19) of 139,000 head per week.
Beef exports hit a low for the year off tight supply
Exports of beef totalled 78,000 tonnes swt in August, the lowest monthly total since January last year. Relative to last August, volumes were back 27%, while year-to-August beef exports are now back 9% on 2019, with constricting supply really starting to take hold.
The top destinations in August were Japan (19,700 tonnes swt), the United States (18,200 tonnes swt) and South Korea (13,000 tonnes swt).
Year-to-August beef exports – top five markets
· Japan: 178,000 tonnes swt (-8% on 2019)
· United States: 156,000 tonnes swt (-6% on 2019)
· China: 145,000 tonnes swt (-16% on 2019)
· South Korea: 103,000 tonnes swt (-4% on 2019)
· Indonesia: 36,000 tonnes swt (-8% on 2019)
For the first eight months of the year, total exports of chilled beef are back just 1% on 2019 levels (relative to a decline of 12% for frozen beef), with exports to the United States, China and South Korea all experiencing good growth. As the herd rebuild gains momentum, the proportion of cows to total cattle slaughter will continue to fall, which should result in a greater percentage of beef being exported as chilled prime cuts rather than as frozen manufacturing mince.
While the first few months of 2020 saw strong demand from China for chilled beef...