Meat and Livestock Australia’s first cattle industry projections for 2022 were released last week, (view our review of the latest projections here), and it is predicting total beef exports to jump back to 1.06 million tonnes swt this year. That would be an increase of 16%, taking it back above 2020 levels. And their longer-term projections are even more positive, with 2023 volumes to lift further to 1.14 million tonnes swt, and beef exports to be 35% higher in 2024 (compared to 2021). To put this into perspective of supply growth, total beef production is forecast to grow by 32% from 2021 to 2024, while cattle herd numbers will be up just 8% in that same period.
If we look at the top four beef destinations (by volume), three of them took significantly less beef in 2021 year-on-year. Japan remained the biggest volume market, gaining about 0.5% market share compared to 2020, but took 13% less Australian beef. Cumulatively, Japan imports have dipped 28% since 2018.
South Korea overtook Japan as Australia’s highest value beef market in 2021, taking 3% more volume and spending an extra 17%. It was particularly after frozen grainfed beef, according to MLA, with its Australian grainfed imports increasing by 18% (compared to grass-fed which were down 7%). January beef exports to South Korea are up year-on-year, and sitting close to the five-year-average and tariffs there on Australian beef dropped at the start of 2022, which bodes well for the coming year.
The US, which imported 31% less Australian beef in 2021, has started the new year very sluggish, with its lowest January volume since 2011, 44% below the five-year-average. According to the latest US imported beef market update from Steiner Consulting Group, a lack of supply and record high Australian prices had US buyers looking to Brazil for their beef needs in the second half of 2021. But there are quota caps on South America, and beef production domestically in the US is on the decline, keeping the door open for Australian beef – especially the grass-fed variety, of which the US is our biggest customer.
What does it mean?
Forecasts for Australia’s beef export supply and demand equation look promising for 2022, with plenty of markets keen enough to continue paying premium prices, even with a slightly waning China market. South Korea has been the standout in 2021, and has started 2022 above year-ago levels, while the Philippines, Vietnam and Thailand all took more Aussie beef last year. That said, overall beef exports have got off to a very sluggish start so far this year, and significant global shipping costs and delays are casting a shadow which could impact trade for much of the year.
- Beef exports fell 15% year-on-year in 2021, but are expected to make that up and then some in 2022.
- The total value of beef exports last year only dipped 4%, and grainfed beef exports out of Australia actually grew by 2%.
- South Korea and US set to continue strong demand in 2022, while China is unlikely to see much upside.
Click on figure to expand
Click on figure to expand