Quarterly grainfed beef exports ease following strong start to 2016

Australian grainfed beef exports for the September 2016 quarter were 3% lower year-on-year, totalling 65,813 tonnes swt. Despite this, total exports for the year-to-September period were at 196,096 tonnes swt – up 1% from 2015 levels, driven by larger volumes shipped earlier in the year.

Exports to Japan during the September quarter eased 2% year-on-year, to 32,370 tonnes swt. An 82% and 26% drop in fullset and chuck roll exports, respectively, underpinned the overall decrease, despite increased shipments of blade, brisket and manufacturing. The lower volume to Japan was predominantly the result of tighter Australian cattle supplies, coupled with greater competition from the US. The proportion of grainfed and grassfed beef exports to Japan, which each accounted for 50% of the total for the year-to-September, illustrated a shift towards grainfed supplies while reduced availability of grassfed product limits exports.

High Hanwoo beef prices in Korea and tight supplies of Australian grassfed beef have seen Australian grainfed exports to Korea increase. Furthermore, as volumes of Australian beef approached KAFTA stipulated safe guard volumes (which have recently being triggered), importers were reportedly pushing to secure product before the 40% tariff was imposed.  Shipments to Korea for the September quarter were 18% higher than the corresponding period in 2015, at 13,727 tonnes swt. For the year-to-September, volumes were 26% higher than year-ago levels, at 39,517 tonnes swt. The increase consisted mostly of larger volumes of blade, brisket and chuck roll, which make up the majority of exports to Korea.

Exports of Australian grainfed beef to China for the September quarter lifted 13% year-on-year, to 7,300 tonnes swt, and totalled 17,901 tonnes swt for the year-to-September period, up 21%.

Volumes to the EU, US and Middle East were down 12% (to 4,011 tonnes swt), 61% (to 1,864 tonnes swt) and 41% (to 1,527 tonnes swt), respectively, for the September quarter.

Grainfed exports to the Philippines lifted 14% to 1,819 tonnes swt for the quarter, and year-to-September volumes near doubled year-on-year, to 6,420 tonnes swt – consisting predominantly of manufacturing beef. Underpinned by firm economic growth and strong demand in the Philippines, the increased grainfed volumes were attributed to low availability of Australian grassfed manufacturing beef.

Going forward, grainfed beef exports are expected to contract with production although not to the extent of grassfed beef. The number of cattle on feed during the September quarter, marketings and further analysis of grainfed beef supply will be available shortly in the ALFA/MLA quarterly lotfeeding brief.