Australian Beef Production to Expand

Continued strong demand from an increasingly diverse range of global markets will combine with favorable seasons to drive an expansion in Australian beef production and exports in 2012, according to Meat and Livestock Australia’s 2012 cattle industry projections released earlier this year.

Australian beef and veal production is forecast to reach a record 2.19 million metric tons this year, up 2.2 percent, as good seasons result in heavier average carcass weights. The influence of “higher marking rates” since 2010 will also be reflected in cattle turnoff and beef production over the medium term.

Total adult cattle slaughter for 2012 is forecast to reach 7.55 million head – up 3.1 percent over the previous year. However, while cattle turnoff will increase over the previous year, supplies will remain relatively tight compared to the herd liquidating drought years of the past decade. Another favorable year, feed-wise, for producers should see herd rebuilding continue to limit female turnoff, while producers will compete for young cattle for finishing.

Global demand for beef is expected to be sustained, if not strengthened in 2012. Total Australian beef exports are predicted to rise 2.7 percent in 2012, to 975,000 metric tons, driven by expansion into Russia, the Middle East, and most southern Asian markets. Traditional export markets will continue to be challenging, with the exception of the U.S. market, which is forecast to improve 28 percent in 2012, as high prices attract additional product, reversing almost a decade of falling Australian shipments.

Australian beef exports to both Japan and Korea are forecast to decline in 2012, as competition from U.S. beef increases, taking advantage of improved market access conditions and a weak currency. Australian shipments to Japan are forecast to contract four percent on 2011, to 330,000 metric tons, while exports to Korea are forecast to decline 15 percent, to 125,000 metric tons.

The outlook for the live cattle trade in 2012 continues to be dominated by prospects to Indonesia, with total exports currently forecast to drop 16 percent in 2012, to 570,000 head.

April 2012 RENDER | back