April is usually a slow beef export month. The run of public holidays mean less beef can be produced and less put on boats. The April just gone followed the usual trend in most markets, but China and Taiwan bucked the trend.
The basic beef export numbers seem weak, but it’s not too different to recent trends. Low cattle slaughter saw April 2022 post its lowest exports since 1996. Figure 1 shows the decline in total exports was largely in line with the seasonal trend.
Total beef exports were down 17% on March, and 15% on March 2021. After last month when we looked at exports consolidating in the bigger markets, this month they bore the brunt of the falls. Beef exports to Japan fell 25% on last year, South Korea was down 26% and the US was down 17%.
Exports to China fell on last month, but were up 8% on last year. Exports to China were still in second place, and just 15% below Japan, which retained first place. This was very strong compared to the average for last year however, which stands at 37%.
Beef export values tell some of the story, but we only have them to February. Figure 2 shows the value of beef exported to China, the US and Japan, divided by the volume. This gives a price per kilogram. It’s interesting that Japan lags behind the other two big markets, but this could have something to do with the number of bone in cuts.
The price of beef exported to China has kept pace with the US, and has been slowly working into the US’s market share.
In their latest update Steiner reported that some shipments to China were diverted in April due to issues uploading ships and transporting beef due to the Covid lockdowns. This is somewhat seen in the data, with Taiwan receiving 915 more tonnes of beef in April than March, and 61% more than April 21 (figure 3). This was the biggest export month to Taiwan since 2019, and shows that demand is still pretty good from smaller markets. When they can get it.
What does it mean?
There is nothing wrong with demand for Australian beef, and we saw last week what it is doing to domestic beef prices, when the inflation figures came out. For the consumer they aren’t likely to get beef any cheaper in the medium term. Even when local cattle supplies lift export demand will underpin prices. More good news for cattle producers.
Key Points
- Beef exports fell in April due to fewer slaughter days, but demand remains strong.
- Taiwan had its biggest month in three years, reportedly thanks to diversions from China.
- Beef export values reached records in February, in line with domestic prices.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, DAWE
