Japan and South Korea, main markets for Aussie beef
November was another challenging month for Australian red meat exports, with tight supply of livestock impacting exports, particularly beef and mutton. Last month exports of beef were 79,900 tonnes shipped weight (swt), 2% down on October volumes but 23% behind the same month last year, tracking in line with reduced levels of cattle slaughter. Total beef exports for the 2020 year-to-November are 954,000 tonnes swt, 14% down on 2019 levels. November represented the smallest total of Australian beef exported to the US since January 2011 at 9,600 tonnes swt, back 30% on the same month last year. A number of challenges are mounting for the US market, which have contributed to this reduction in exports.
As COVID-19 cases continued to rise, the impacted US processing capacity resulted in a short-term spike in imported beef demand, back in May. Since then, US cattle slaughter has run at near year-ago levels, bolstering beef production and shoring up US self-sufficiency. Meanwhile, US restaurant activity remains subdued due to ongoing lockdown restrictions. A final consideration is that competition within the market is certainly tight. While import volumes from Mexico, Australia and New Zealand dropped away in October, imports from Canada, Nicaragua and Brazil lifted 10%, 20% and 51%, respectively (Brazilian volumes are coming off a lower base).
On the other hand, exports to Asian markets such as Japan and South Korea have increased in November, according to Meat and Livestock Australia. In November, 25,400 tonnes swt of beef was exported to Japan. Trade to Japan, Australia’s top beef market, has remained steady through the year despite supply and demand challenges. Of note last month was the volume of manufacturing beef sent to Japan, which eclipsed 12,000 tonnes swt. This is impressive, considering the monthly average for the past three years was below 10,000 tonnes swt.
November was a huge month for exports to South Korea, with beef exports reaching 16,600 tonnes swt, the largest total for South Korea since August 2018. After Japan, South Korea was the next largest destination, accounting for 21% of all Australian beef exports in November, which is unexpected considering the Korean-Australia beef import safeguard was triggered last month.
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