Beef Week 2021.

China is back building up its beef importing business, and South America is cashing in, with their export volumes happily meeting the demand. Both Brazil and Argentina have increased beef exports for the first half of 2022, with increased slaughter in both countries allowing for more product to head offshore.

China’s beef imports got off to a sluggish start as it continued to be impacted by Covid-19 lockdowns, but is making up for lost time now, with imports on the rise. Meanwhile Australian beef exports have fallen back below year-ago levels for the month of July, mainly due to lower volumes sent to the US.

Starting off at home, Australian beef exports are now tracking 6% lower for the year-to-July than the same period in 2021. The July total of 74,948 tonnes shipped weight was 8% below year-ago levels, and 22% below the five-year-average for the month. Lower exports to the US are one of the biggest influences, as their high domestic slaughter due to drought turnoff depletes its import demand. The US took imported 15% less beef overall year-on-year for the month of June, with Australian imports for that month back 27%. For the year-to-July, Australian beef exports to the US are down 12%. Obviously Australia’s domestic slaughter levels are also still historically low, but they are expected to increase from here on out.

Australian beef exports to China have been tracking higher year-on-year for the past two months, and are now 1% higher for the year-to-July than in 2021. But it is Brazil that has been capitalising on China’s renewed appetite for Beef. Brazilian cattle slaughter is estimated to be up 13% for the first six months of the year, which has them set to achieve record high exports this year. After being blocked from the Chinese market for a sizable chunk of last year, that trade is back on track, with China taking 58% of Brazil’s exported beef for the year-to-June. China’s beef imports for June were up 43%, making up for a slow start to the year, with Brazil accounting for most of this.

China is not the only market where Brazilian beef is faring better, with US imports of its product up 418% year-on-year for the January to June period according to Steiner Consulting Group. Brazil is the only country which has seen significant growth in its exports to the US so far in 2022, but that market is still only making up 6% of their beef export trade – compared to the nearly 15% it makes up of Australia’s market share.

Steiner’s latest Global Beef Market Review estimates total beef exports out of Australia to rise 7% year-on-year in 2022, just above the overall global exports volume, which is set to be up 6%.  They estimate Brazil will have the biggest increase, up 15.5% on 2021, with Argentina and New Zealand dropping 5% and 3% respectively. On the receiving end, China’s total imports are set to rise 4% for the year, and the US’ 7%, while Hong Kong will lose 18% and South Korea 2%.

What does it mean?

With Brazilian production and exports on the rise, and US import demand slowing, Australia will have to push to keep its share of China’s beef import market. As Australian domestic slaughter increases and prices come back slightly, export volumes will have capacity to increase as long as the demand from Asia continues.

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Key Points

  • Australian beef exports are tracking 6% lower than 2021 for the year-to-July, with volumes to the US and Japan remain sluggish.
  • Brazil is expected to increase its beef exports by more than 15% year-on-year, and will make up 20% of the global beef trade.
  • Chinese demand is on the rise, with its June imports up 43% on the same month last year.

Data sources:  ABS, Mecardo

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