Australian beef export volumes and values continue to track lower year-on-year, and well below five-year-average levels in 2020. For the year-to-October, 2020, 874,421 tonnes of beef have headed overseas, compared to more than 1 million tonnes for the same period in 2019, a drop of 13 percent. Despite global economic challenges, however, this decline would appear to continue to be primarily supply driven, with year-to-date eastern states cattle slaughter tracking at about 14% lower for 2020, according to the National Livestock Reporting Service figures.
Japan was the largest beef export market for Australia in October (and for 2020 so far), having taken 9 percent less product for the year-to-date compared to 2019. Japan is also the top market for chilled beef specifically, and their continued demand in this area has led to Australia’s total chilled beef exports sitting at just 2% lower than last year. The US, China and South Korea have all imported more Australian chilled beef for the year to October than they did in 2019, while their frozen product intake has dropped. Frozen Australian beef exports overall have dipped 17% year-on-year, as China remains the biggest market for this category of Australian beef.
Chinese trade suspensions of five plants that Meat and Livestock Australia describes as “significant suppliers to the market” has contributed to Australian beef exports to the country being down 28% for the year-to-date. In October 2020, Chinese volumes were down a whopping 59% year on year, pointing to trade issues not being the only contributor. Chilled beef exports to China have increased, as the affluent look to premium Australian product, but competition for the volume frozen market has ramped up from South America.
Australia’s fourth-largest beef export market, South Korea, is likely to raise the tariff on beef imports from here to 30% (up from the usual 21.3%) this month. This usually means the volume of beef from Australia dips significantly for the remainder of the year. While beef exports to South Korea are down just 5% for the year-to-date, this has meant the tariff increase has been triggered a month later than last year, and may not impact the market in any significant way.