Ongoing supply constraints limit February beef exports

Australian beef exports in February totalled 74,816 tonnes shipped weight (swt) – down 18% year-on-year, underpinned by ongoing supply constraints across the country (Department of Agriculture and Water Resources). However, beef exports through February lifted 47% month-on-month – albeit coming off an extremely low base in January. Click here to view February Monthly Global Trade Summary.

Chilled beef exports for the month declined 17% year-on-year, to 20,573 tonnes swt, while frozen exports dropped 18%, to 54,243 tonnes swt. Grainfed beef exports totalled 20,715 tonnes swt, down 11% year-on-year, while grassfed volumes declined 20%, to 54,101 tonnes swt.

Japan was the best performing market for beef exports in February – shipments totalled 22,818 tonnes swt, representing a 28% increase compared with the same period last year. Grainfed exports were 10% higher year-on-year, and grassfed beef performed strongly in February, up 54% year-on-year. Looking ahead, beef exports are set to benefit from a tariff reduction on 1^st April under the Japan Australia Economic Partnership Agreement (JAEPA).

Exports to the US declined 35% year-on-year, to 17,292 tonnes swt. Shipments to the US continue to track well-below previous years; for the year-to-date, (YTD) beef exports to the US stand at 28,906 tonnes swt, compared to 2015 and 2016 YTD volumes of 63,631 tonnes swt and 43,336 tonnes swt, respectively. Exports to the US are being restricted by tight spot supplies from Australia, but also by increasing US beef production. Furthermore, the strong start to 2017 for the Australian dollar continues to deter US importers. Steiner Consulting Group report that end users are still reluctant to enter the market with prices at current levels – as imported grinding beef prices continue to trade at a premium to US domestic beef.

Ongoing supply constraints continue to be reflected in some of Australia’s other major markets. To Korea, Australian beef shipments declined 27% year-to-year in February, to 20,515 tonnes swt. Beef exports to China were relatively unchanged year-on-year, at 13,751 tonnes swt.

Elsewhere, beef exports to the EU in February declined 35% year-on-year, to 1,330 tonnes swt. Volumes to Indonesia were down 40% compared with the same period last year, to 3,085 tonnes swt.