Grainfed export growth in Asia

15 August 2017

A historically low Australian cattle herd and the consequent tight supplies constricted numbers on feed during the 2016-17 fiscal year, particularly in the September quarter 2016. This resulted in Australian grainfed beef exports for 2016-17 easing 4% year-on-year, to 257,781 tonnes swt, although remained well-above the five-year average (DAWR). Volumes to key markets in Asia, however, registered growth for the 12 month period.

Shipments to Japan accounted for 52% of Australian grainfed exports for the year, with 128,867 tonnes swt exported – up 1% year-on-year. Growth was assisted by the limited supplies of grassfed beef, increased grainfed production and the reduction in tariffs on 1st April under the Japan Australia Economic Partnership Agreement (JAEPA), particularly in the latter half of the year.

The proportion of grainfed shipments to Korea reached a high this year, accounting for 20% of total grainfed exports. Volumes lifted 1% year-on-year, to 37,355 tonnes swt, assisted by larger volumes imported in the first half of the year which triggered calendar year safeguard volumes.  However, increased domestic production of Hanwoo beef, increased competition from the US and issues with import finance slowed Korean imports throughout the second half of the fiscal year.

Volumes of Australian grainfed beef to China for the 12 months to June lifted 11% year-on-year to 26,492 tonnes swt, accounting for 10% of total grainfed exports. Growth to China has been substantial, lifting 86% from the five-year average as a result of greater market access and growing demand.

Meanwhile, exports destined for EU totalled 13,749 tonnes swt during 2016-17, down 21% year-on-year. However shipments remained 11% above the five-year average.

Despite fewer cattle on feed during the start of the fiscal year, numbers hit record levels in the latter half – arising from drying conditions, easing cattle prices and lower grain prices. These factors are anticipated to support ongoing expansion in the lotfeeding sector and grainfed production, despite recovering grain prices more recently.

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