Beef trade much lower this April

Australian beef exports were 24% lower this April, compared with a year ago, at 86,527 tonnes shipped weight (swt). This was also the smallest beef export month (excluding January each year, since April 2013). While lower slaughter in the eastern states remains the key contributing factor to the drop in shipments, there are other influences in key overseas markets affecting the distribution of trade.

The largest export destination during April was Japan, with a 4% drop from last year, to 23,568 tonnes swt. There was good growth in a few cuts, including brisket and striploin, but a drop in the fullset trade. Some growth in the US shortplate trade into Japan is having an impact on in-market prices, and demand for some Australian beef.

There was a large drop in shipments to the US – down 39%, to 23,413 tonnes swt, led by a 42% drop in manufacturing beef (which is the largest category of beef exported to the US by a large margin), and notable drops across virtually all categories of beef. Chilled grassfed beef exports to the US declined 32% - not quite as significantly as the overall total, suggesting reasonable strength in that sector (relative to beef in general).

South Korea was one of the only major markets to record an increase in the Australian beef trade during April, up 6%, to 14,397 tonnes swt. This was largely led by increases in trade in chuck roll and silverside/outside. Other cuts are reportedly well supplied in market, particularly brisket, and short ribs are facing increasing competition from the US. Korean Halal regulations have also changed recently, which both exporters and importers appear to be getting used to quite quickly. Further assisting imported demand in Korea at the moment is the reduced tariff and relatively tight locally produced Hanwoo availability.

Most beef categories to China were lower this April, contributing to a 44% drop in trade volume, to 7,604 tonnes swt. One of the few categories to record year-on-year growth was manufacturing beef, indicating tougher trading conditions at the higher end of the market. There was a similarly large decline in trade to the Middle East, down 46%, to 2,740 tonnes swt – accounted for predominantly by a slow month to Saudi Arabia, which continues to face heavy price competition from Brazilian beef.

Other key markets for Australian beef included:

• Indonesia, with shipments 15% lower than last year, at 2,583 tonnes swt;
• Taiwan, up 2%, to 2,363 tonnes swt;
• Philippines, down 5%, to 2,321 tonnes swt; and
• Canada, down 58%, to 1,604 tonnes swt.