Australian red meat exports surge on back of dry conditions

Sheepmeat shipments reach record highs

Australian sheepmeat exports in May totalled almost 43,200 tonnes shipped weight (swt) – the largest calendar month ever recorded for combined lamb and mutton exports.

However, it was the lamb component of exports that underpinned the record. Lamb exports in May were recorded at 29,400 tonnes swt, easily surpassing the previous high set in March. Mutton exports totalled 13,800 tonnes swt, remaining consistent with previous months this year.

The record month brought year-to-date lamb exports to 117,000 tonnes swt, an increase of 14% on 2017 levels. This year-to-May total is the largest ever start to the year and has been driven by growth in all key destinations Middle East, China and the US.

A very dry year so far in key supply regions has seen slaughter levels tracking higher year-on-year. For the calendar year-to-April, lamb slaughter has lifted 8%, at 7.75 million head; production has followed the trend, also increasing by the aforementioned margin. Exports continue to benefit from the lift in supply but also reflect robust global demand for sheepmeat. In addition, further declines for the Australian dollar were sustained throughout May – as has been the case since the end of January – supporting exports.

May year-to-date lamb exports:

• Middle East, up 30%, to 32,200 tonnes swt
• China, up 10%, to 23,300 tonnes swt
• US, up 8%, to 23,800 tonnes swt

May year-to-date mutton exports:

• Middle East, down 10%, to 20,100 tonnes swt
• China, up 92%, to 14,600 tonnes swt
• US, down 9%, to 6,800 tonnes swt
• Malaysia, up 68%, to 7,200 tonnes swt

Beef exports reach levels not seen since 2015

Australian beef exports surged in May following a dry-induced increase in supply across the country. In fact, at 109,700 tonnes swt, this month was Australia’s second largest May on record (only surpassed by May 2015 during the middle of the drought induced herd liquidation). This month’s exports were up 21,500 tonnes swt or 24% on April’s figures and 13,900 tonnes swt or 15% higher than May last year.

Eastern states cattle slaughter highlights the increases in turn-off being seen across the nation with cattle slaughter in May totalling just over 580,000 head, an increase of 10% year-on-year. This brought the year-to-date total to 2,690,000 head, up 8% on 2017 levels.

Most key export destinations experienced some level of growth this month, bringing the year-to-date total to 435,600 tonnes swt, an increase of 15% on 2017 levels. This year-to-May total is Australia’s third largest start to the year, behind both 2014 and 2015, but above the last two years and well above any total before 2013.

Australia’s beef exports to Japan totalled 125,700 tonnes swt for the year-to-May, an increase of 12% year-on-year. This was followed by the US, totalling 91,700 tonnes swt for the year-to-date, which lifted 4% on year-ago levels. Volumes to Korea rose 15% from year-ago levels, to 61,700 tonnes swt. China, increased by 40% year-on-year for the first five months of 2018, to 59,400 tonnes swt.

Other notable increases for the year-to-May included:

• Indonesia, up 32%, to 24,300 tonnes swt
• The Philippines, up 39%, to 14,100 tonnes swt
• Malaysia, up 21%, to 4,400 tonnes swt
• UAE, up 16%, to 3,900 tonnes swt