MLA’s mid-season update to its Australian cattle industry projections revealed that beef exports are forecast to exceed one million tonnes in 2013.
The report pointed out that Australian beef exports had already broken numerous records in the first half of the year, despite a high Australian dollar, driven by impressive demand from China and the Middle East. It added that demand from emerging markets was set to remain strong, particularly now that the dollar had come down from historically high levels.
“Under the assumption that the Australian dollar will remain well below parity for the remainder of 2013, it should help to maintain demand and interest for Australian beef from overseas markets, which is especially important if Australian supplies tighten and prices increase,” it said.
Exports to traditional markets are expected to remain subdued, with beef exports to Japan forecast to total 290,000 tonnes swt for 2013, the lowest annual level since 2003. Exports to South Korea should remain relatively stable this year, but could come under pressure in 2014 as Korea reduces its tariffs on US beef, the report revealed.
The report added that growth in live cattle exports would be dependent on trade relations between Australia and Indonesia, and that the current forecast for 2013 was 575,000 head.
“Given the availability of very little new information for the live trade to Indonesia, overall export numbers for 2013 have only been altered by the recent announcement of an additional immediate allocation of 25,000 head. The export trade to other markets is likely to remain small in comparison to the potential of the Indonesian trade, as ESCAS continues to be enforced,” it said.
MLA recognised that Australia’s export performance in 2012-13 “could not have been achieved without the drought-induced surge in slaughter”, which had put an end to the expansion of the Australian cattle herd.
In the short term, it predicted supplies would tighten in the southern states, which have had a wet start to the winter. However, it said that northern producers continued to experience drought conditions, which should help maintain turn-off.