Australian grainfed beef exports continue record run

Australia exported 218,602 tonnes swt of grainfed beef during the first 10 months of 2015 – an increase of 17% on the same time last year, and 3% above the previous record for the period, which was in 2006 (Department of Agriculture).

In addition to the large number of cattle on feed, the high volumes shipped this year and in 2006 were driven by various demand factors, including:

Stable demand from Japan underpinning volume

• While Japan’s intake during the period has declined from over 156,800 tonnes swt in 2006 to 116,359 tonnes swt in 2015, the market is still taking 53% of total grainfed shipments from Australia, maintaining a solid foundation for the Australian grainfed sector.
• Demand from Korea increased to 35,404 tonnes swt this year (7% higher than 2006), while the US has taken 13,544 tonnes swt (17% below 2006).

Diversified markets

• In 2006, the above markets took 97% of all grainfed beef shipments during the same period. In 2015, the proportion dropped to 76%, with the reminder of the volume absorbed by emerging destinations, including China (110 tonnes swt in 2006, to 17,291 tonnes swt in 2015), Europe (nil to 13,956 tonnes swt), the Middle East (183 tonnes swt to 8,384 tonnes swt), and the Philippines (777 tonnes swt to 3,764 tonnes swt).

Dry conditions & US presence continue to influence

• The growth in grainfed beef exports this year has materialised as a combination of global demand growth and increased supplies, after many months of very dry conditions in key cattle producing regions in Australia. The situation in 2006 was similar but more pronounced, as Australia was also experiencing drought at that time, but the absence of US beef in North Asia market (due to their BSE outbreak in 2003), provided Australia an extremely strong incentive to produce more grainfed beef.
• US beef has now fully returned to the Japanese and Korean markets, and its recovery in production – anticipated to start from late next year – will likely pose stronger competition to Australia in 2016.

In the meantime, Australian grainfed exports this year are forecast to finish strongly, with a chance of breaking the calendar year record of 257,482 tonnes swt set in 2006.