Gold for Japan in the beef export games

Aussie Wagyu

Whilst our Australian athletes have been competing for gold in Japan, our beef exports have also been very competitive there, taking out the gold medal for imports of Aussie beef. Total beef exports picked up in July despite the usual winter supply issues.

Cattle slaughter wasn’t particularly strong in July, but with no public holidays and 22 weekdays, beef exports had their second strongest month of the year.  Figure 1 shows that July beef exports were 10.4% higher than June, but when compared to 2020 and 2019 they were much lower.  July beef exports declined 9% and 29% on 2020 and 2019 respectively.

Japan was the star performer in terms of beef export markets.  Beef exports to Japan lifted 15% on June, and the same over July last year.  The 24,199 tonnes exported to Japan was the highest level this year, and the second-highest since March last year.  Figure 2 shows Japan bucking the trend of falling supplies.

South Korea maintained its strong demand in July, importing 14,000 tonnes, again marginally more than the US and China.  Figure 3 shows that for the year to date South Korea has moved into second place in the market share stakes (or steaks) surpassing both the US and China thanks to consistently strong demand.

The main driver behind the shift in market share is more to do with supply than demand.  The US and China import more low-value beef, the stuff that comes from cows and manufacturing steers.  In the US much of our beef ends up in burgers, mixed with fatty trim from US Grainfed Cattle.

The supply of well-finished and grain-fed cattle has also declined with the smaller herd, and higher-value beef production has waned as much. However, not nearly as much as low-value supplies. Hence Japan and South Korea, both of which import higher value beef, have managed to maintain export levels.

What does it mean?

There is nothing wrong with world beef demand.  Australia could easily find markets for much more beef if it was available.  The strong demand out of Japan and South Korea, despite prices hitting record highs, is positive for cattle markets.  The floor for prices when cattle supplies improve seems to keep creeping higher, which is good news for those engaged in rebuilding their own herds.

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Key Points

  • Beef exports lifted in July despite relatively steady slaughter rates.
  • Export to Japan lifted strongly, and Korea was also strong thanks to good supplies of high-value beef.
  • Strong demand despite high prices is positive for prices in the medium term.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources:  DAFF, Mecardo

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