Australian beef exports lifted higher in June to exceed the five-year average for the second time this year. The total of 94,009 tonnes was 3% higher than May, 18% higher than June 2022 and 28% higher than June 2021. This brings year-to-date exports up to 20% higher than the same period last year. While higher slaughter numbers continue to support higher export volumes, there are also positive signs that demand is improving, specifically in the United States and China.
Key Points:
Beef export volumes in June were 18% higher than last year
The US has taken over as the top export destination by volume
While exports to China were dead flat compared to May, they are up 40% on last year
Slaughter levels remain 24% higher than the same period last year and continue to trend higher. Weekly slaughter numbers reached 123,325 head in the week ending 1 July – stable on the previous week but 25% higher than the same week last year.
Slaughter numbers are likely to remain at or above 120,000 head a week, and if they do, export volumes are expected to stay above the five-year average for the rest of the year.
Figure 1: Monthly beef exports 2021 – June 2023. Source: DAFF
Australia’s top four beef export destinations have started to diverge again. South Korea (14,486t) has dropped off the pace, while the US (20,585t) has fired up to become Australia’s top beef export destination. China and Japan were relatively flat month-on-month, with China (19,583t) up 40% compared to last year, while Japan (18,831t) was down 16% from last year.
Beef production in the US is gradually falling, as the herd population diminishes and some areas receive much-needed rain. Prices are consequently moving higher, which is improving the cost competitiveness of Australian beef exports.
This has led to the highest year-on-year increase of any export market at 89%.
Figure 2: Monthly beef exports by destination 2021 – June 2023. Source DAFF
A further influence that may increase the demand for beef broadly in the US is the Proposition 12 laws recently upheld in the Supreme Court of California. The added regulations regarding the area available for confined farm animals may reduce the supply of pork products and lead to greater demand for beef.
Strong export volumes to both China and the US are positive signs for Australian cattle producers. The continued flow of beef to these markets will be an essential part of clearing the excess supply of slaughter cattle and providing some re-balancing of supply and demand dynamics.
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