2 April 2012

3 minute read

Oceania

The European Union (EU) is Australia’s highest value beef export market per tonne – at A$9,302/tonne it easily outperforms Hong Kong, the next highest value large market, at $A5,856/tonne.

Beef exports to the EU reached 12,838 tonnes swt in 2011, an increase of 30 per cent year-on-year, despite exports being restricted under a variety of quotas that limit access to a market of 500 million consumers.

Most Australian beef is shipped to the EU under both the high quality beef ‘Hilton’ quota (with 7,150 tonnes of Australian access) and the high quality beef grainfed beef quota (20,000 tonne access shared with eligible nations).

Changes in these quotas – rather than to the continent’s economic conditions and consumption patterns – is the most important factor impacting Australian beef exports to this prime destination.

From August this year, the high quality beef grainfed quota will increase from the present 20,000 tonnes to 48,200 tonnes – providing significant scope to further increase exports in the coming years.

Beef quotas unfilled

Figures from the International Meat Trade Association and European Commission indicate that most EU beef quotas were not filled during 2011.

The ‘Hilton’ quota is administered on a financial year basis and has a total allocation of 65,250 tonnes swt, with 23,333 tonnes swt unallocated in 2010-11.

Argentina is the largest quota holder with 28,000 tonnes swt – filling 93 per cent of its allocation in 2010-11. Brazil (allocation of 10,000 tonnes) and the US and Canada (11,500 tonnes) fell well short of using their full quota allocations, using only five per cent respectively.

Last year, Australia filled 90 per cent of its allocation, down from the 99% of the allocation filled in the previous three years.

The high quality beef grainfed quota was opened in 2009, with Australia gaining access in January 2010. Access is shared between the US, Australia, New Zealand, Uruguay and Canada and administered on a financial year basis.

In 2010-11, 90 per cent of the 20,000 tonnes was utilised, with Australia shipping 4,038 tonnes swt of grainfed product. This grainfed quota is to increase to 48,200 tonnes swt in August 2012.

Other beef quotas that Australia has access to were also significantly under supplied in 2011. Only 22 per cent of the 63,703-tonne manufacturing beef tariff rate quota was filled last year, which the 1,500-tonne frozen thin skirt tariff rate quota was only 53 per cent utilised.

Capacity to increase Australian supply

With quota increases, and European production declining, there is ample scope for Australian producers to fill this gap. Processors and exporters to Europe have expressed concerns over the supply of EU eligible cattle.

To be eligible for export to the EU, beef or meat products and some by-products, must have been obtained from cattle sourced from a European Union Cattle Accreditation Scheme (EUCAS)-accredited supply chain, which includes producers, feedlots and saleyards.

The EU has a number of market specifications including:

• Steers and heifers of any breed in a 380-500kg lwt range
• Cattle with a 320-420kg cwt and 7-2mm of fat
• Guaranteed traceability of all animals through NLIS
• No use of hormone growth promotants
• Milk or two-tooth, requiring genetics and grazing management to turn-off cattle younger than 30 months.

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