Australia loses its top spot as Japan’s beef supplier, but remains optimistic
Japan turning to the US
Japan, the world’s 4th largest importer of bovine meat (fresh and chilled, and frozen), has been a consistent purchaser, importing around 580,000 MT per year and with imports slowly creeping upwards. With the disruptions caused by COVID19, its imports in 2020 dropped slightly to 600,396 MT, from 615,390 MT in 2019. The first 8 months of 2021 were also slightly lower than the same period last year, at 390,640 MT versus 2020’s 406,475 MT. While there is nothing spectacular happening in terms of the volume of Japanese bovine meat imports, the composition of these imports is changing, swinging away from Australia, in favor of the US. Ten years ago, Japan bought 65% of their bovine meat from Australia. So far this year, it is only a pinch more than 40%.
Source: ITC Trade Map, DAWE Australia
Fewer cattle up for slaughter
Australian cattle farmers are rebuilding their herds, after liquidating large amounts following the drought which was broken early in 2020. Dry conditions between 2017 and early 2020 forced many cattle farmers to put more cattle up for sale, consequently increasing beef exports between 2017 and 2019. With conditions returning to what is deemed normal in Australia, these cattle farmers are now rebuilding their herds. This means more cattle are being kept as breeding animals, and fewer are going to market, resulting in lower supply of beef coming from the land down under. 2020 bovine meat exports were only 1.14 million MT, from 1.33 million MT in 2019 and 1.20 million MT the 5-year average. Beef exports in the first 10 months of 2021 continued to be well below previous years. According to Australia’s Department of Agriculture, Water, and the Environment (DAWE), exports for the first 10 months of 2021 were only 734,908 MT, compared to 874,418 MT for the same period in 2020.
Source: ITC Trade Map, DAWE Australia
The US overtook Australia in Japan and South Korea, but China still opting for Australian beef
The mediocre exports from Australia reported for September and October means the USA will most likely be Japan’s top supplier for the rest of 2021. In Korea, the US already overtook Australia as the number one bovine meat supplier back in 2017. In 2020 the US provided 55% of Korea’s fresh and chilled, and frozen bovine meat, compared to Australia’s 37%. This is almost a complete reversal from 5 years ago when Australia supplied 57% and the US 36%. As far as China Mainland, Taiwan, and Hong Kong are concerned, Australia exported 285,233 MT of bovine meat in 2020, far more than the 158,662 MT by the US. However, combined, Australia and the US only make up 17% of China’s total bovine meat imports, with Brazil by far the largest supplier.
Source: ITC Trade Map
Australian cattle farmers optimistic about the future
While cattle exports have been slow in the first 8 months of 2021, cattle farmers are optimistic about the future of Australian beef. Cattle production is forecast to expand when farmers have rebuilt their herds, which should lead to an increase in beef production. Overall demand from Japan and Korea will most likely remain steady, meaning competition between Australia and the US will be fierce in these markets. Demand from China is unpredictable but could shape the dynamics of both the Australian and the US beef industries. China bought only 11% and 6% of their bovine meat in 2020 from Australia and the US respectively, with the bulk coming from Brazil. However, as demand for higher-quality beef increases, demand could swing to the US and Australia.
Source: ITC Trade Map
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