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Trump, Brexit Signal Changing Fortunes for Aussie Beef Exports

15 March 2017

AUSTRALIA - Since Australia's beef export value peaked in 2015/16, at $8.5 billion, it has slipped and will continue to slip this year.

But Meat and Livestock Australia's global market managers are upbeat about new and emerging opportunities in Europe and Britain, and building on successes in Japan and Korea, according to Australia's ABC News.

Domestically Australian cattle prices have already fallen 10 to 15 per cent from their peak last October, and the key market indicator for prices (the Eastern Young Cattle Indicator) is sitting around 614 cents/kilogram, which although historically quite high is well off records set last year of more than 700 cents/kilogram.

Peak industry group Meat and Livestock Australia (MLA) is forecasting the cattle price could fall another 50 cents, into the high 500 cents/kilogram this year.

At the Global Beef Markets Forum in Brisbane today, MLA's regional managers have returned to Australia to share their insights.

"We're really operating in a quite tough global trading environment at the moment," MLA's general manager of overseas markets Michael Finucan said.

"We've got a short supply of cattle and high price for our beef internationally because of that.

"The global trade environment is changing because of protectionism and our competitors are getting more access.

He said the extra cattle supply in South America is being marketed in China and Middle East as lower cost beef.

Because that has put pressure on beef prices, Australia is seeking niche markets, like grass-fed beef over grain-fed beef in the US.

In the United States, 90 per cent of our exports in 2016, frozen and chilled grass-fed beef is being targeted to younger Americans, the Millennials.

"They have a higher disposable income, and grass-fed beef is still a niche market, and we estimate it's less than 3 per cent of the US beef supply," MLA regional manager in the USA Rob Williams said.

"But the people who buy grass-fed buy it for particular reasons: because it's natural, it's healthy and more importantly they see animal welfare issues as important because that concern is tied to grain-fed beef cattle," he said.

Australia's beef market in the US was worth $1.8 billion in the 2015/16 financial year, but that had fallen from the high point of $2.2 billion the year before.

Australia faces big challenges with President Trump's ambition to introduce a 20 per cent border adjustment tax plan.

"We're still trying to keep a level head about this, it's sitting with their House and their Senate, and we don't know the likelihood of it getting through," Mr Williams said.

"We're hoping that level heads prevail and business continues as usual."

TheCattleSite News Desk

Top image via Shutterstock



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