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Influx of Cattle Drives Record Export Start to 2013

07 May 2013
Meat & Livestock Australia

AUSTRALIA - The significant increase in the number of cattle slaughtered so far in 2013 in Australia has been matched by a record volume of Australian beef shipments, according to analysts at Meat and Livestock Australia.

Exports for the first four months of 2013 reached 308,755 tonnes up 10 per cent on the previous year and 8,000 tonnes ahead of the previous January to April record, set back in 2007 according to the figures from DAFF.

Assisting the record start to 2013 was a 19 per cent year-on-year increase in exports for April, at 85,332 tonnes – the highest April volume since 2008.

The persistent widespread dry conditions, combined with the build-up in the national herd over the past three years have combined to cause the indicative eastern states adult slaughter for the first four months of the year to total 172,000 head more than the corresponding period in 2012, MLA said.

While the increased supply has flowed through to exports, the lower Australian cattle prices have been the primary avenue offsetting the impact of the strong Australian dollar, thus helping to keep Australian beef prices competitive in most overseas markets.

During April, shipments to Japan were back 6 per cent year-on-year, at 23,115 tonnes, with the weaker yen and increased competition from the US continuing to challenging trade.

The year-on-year decline for April largely mirrors the overall decline to Japan for the first four months of 2013, down 5 per cent on last year, to 85,452 tonnes.

Attractive prices and record volumes to China, along with strong competition from NZ, contributed to Australian beef shipments to the US for April declining 7 per cent year-on-year, to 17,722 tonnes.

After a sluggish start to the year, exporter optimism towards the US reportedly remains, albeit assisted by an expected seasonal slowdown in shipments from NZ and forecasts for tighter US beef production.

However, it should be noted that Australian volumes for the first four months of 2013 to the US are well below initial expectations, back 20 per cent year-on-year, totalling 64,796 tonnes.

Australian beef exports to China for April totalled 11,654 tonnes - exceeding shipments to Korea for the third consecutive month.

For the first four months of 2013 exports to China have exceeded 40,000 tonnes – an increase of 38,000 tonnes on the same period last year and helping to explain the slower than anticipated volumes to traditional markets of the US and Japan.

While the longer term outlook for Australian beef to China is still somewhat uncertain, every month that passes by is increasing confidence for the future of the trade, with Australian shipments for 2013 now estimated to exceed 80,000 tonnes.

Exports to Korea for April were up 27 per cent year-on-year, at 9,606 tonnes, albeit this is compared against a very low 2012, when demand from Korea was particularly weak during the first half of the year. Reflecting the improved demand so far in 2013 has been a 20 per cent increase in exports for the first four months of 2013, at 38,012 tonnes – just behind the volume to China.

Like China, Australian beef exports to the Middle East in early 2013 have exceed all expectations, with shipments for April falling just three tonnes short of the previous record high set two months earlier, totalling 5,460 tonnes – up 142 per cent year-on-year. For January to April 2013, exports totalled 19,105 tonnes – 111 per cent, or 10,056 tonnes above the corresponding period last year, with Saudi Arabia taking over 3,000 tonnes in April alone.

Increased volumes were also registered to the EU for the past month, up 13 per cent year-on-year, at 1,620 tonnes, as additional volumes of chilled beef continue to enter the market.

Other markets to register increased year-on-year volumes during April included a number of South East Asia destinations, including Malaysia (up 52 per cent, at 1,443 tonnes), Indonesia (up 101 per cent, at 2,800 tonnes ), the Philippines (up 197 per cent, at 2,400 tonnes) and Singapore (up 26 per cent, at 944 tonnes). However, declines were registered to Taiwan (down 16 per cent, at 2,903 tonnes) and Hong Kong (down 39 per cent, at 367 tonnes).

Looking ahead, with the higher cattle slaughter expected to be sustained through May, along with lower cattle prices, exports are expected to sustain their record pace. Indeed, given recent monthly performances and no disruptions to processing activities expected throughout May, the all-time high monthly record of 94,963 tonnes set in November 2006 could come under significant pressure.

TheCattleSite News Desk

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