Why lower beef exports are not all bad news for Australia

Australia exported its lowest amount of beef in almost two decades, but it’s not all bad news for the industry.

Australia’s beef exports fell to their lowest level for almost 20 years, but higher prices have kept earnings strong.

Tough competition from other exporting nations like the United States put pressure on Australian beef, with the US recording 20-year high volumes into Australia’s regular customers like Japan and South Korea.

But the flip side was the price, and despite the smaller volume sold, beef export earnings were their highest since 2019.

Meat and Livestock Australia business analyst Tim Jackson said the Australian volume of beef exported was the lowest since 2003.

Exports were down to Japan, the US, South-East Asia, South Korea and the Middle East North Africa region.

While Chinese exports rose 7 per cent year-on-year to 158,000 tonnes, that figure was well down on the more than 300,000 tonnes it bought in 2019. Much of this shortfall was filled by Brazil.

But in a positive, exported beef averaged $11.09/kg for products sold until mid-October and peaked in June at $12.07/kilogram.

“Australian export (values) had the biggest year since 2019, even as supply was substantially smaller,” Mr Jackson said.

“These high prices came in the face of some of the strongest competition exporters have ever seen in our biggest markets.”

Cattle Australia chairman David Foote said herd rebuilding and favourable seasonal conditions have seen the herd grow about 5 per cent but the supply of cattle for slaughter shrunk.

Beef exports have fallen to their lowest level in almost 20 years as the herd rebuild continues.

Mr Foote said the number of cattle processed in 2022 was down about 550,000 on the forecast to a level about 16 per cent lower than the previous six-year average.

“The reduced kill capacity was mainly as a result of the impact of reduced slaughter capacity, labour shortages and post-farm-gate supply chain constraints,” he said.

“MLA forecasts indicate Australian beef exports should increase in 2023 as producers start to move the cattle they have been holding in order to make the best of seasonal conditions.”

Episode 3 director Matt Dalgleish said Japan remained Australia’s number one customer for Australian beef taking 25.1 per cent, but this needed to be put into perspective as it was 23 per cent lower than the five-year average.

China took 158,086 tonnes or 18.5 per cent of all beef exports, but this was down nearly 14 per cent on the five-year average.

“Trade tensions and additional competition from the US has seen the Australian beef footprint in China dwindle somewhat, (so) hopefully a diplomatic olive branch extended to Chinese authorities in recent times will start to see trade volumes in beef building again into 2023.”