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2012 proved to be a record year for Australian beef shipments, with a rapid finish pushing the calendar year total to 963,799 tonnes swt – an increase of 2% on the previous year and just ahead of the previous record set in 2008 (957,482 tonnes swt) (Department of Agriculture, Fisheries and Forestry – DAFF).

While 2012 ended up as the largest volume year on record, the final result was largely in contrast to the very tough trading conditions for exporters throughout the year. The high A$, weak consumer demand in Japan and Korea (especially for the first half of the year) and increased competition in many markets impacted export returns, especially for chilled beef. However, there were also several high points for the trade, including historically high global prices for manufacturing beef, a 33% year-on-year increase in shipments to the US (224,007 tonnes swt), along with record shipments to China (32,905 tonnes swt, up 324%), Taiwan (38,281 tonnes swt, up 4%) and Singapore (14,087 tonnes swt, up 46%).

On the supply side during 2012, a surge in slaughter and beef production during the final three months of the year facilitated an increase in beef exports, assisted by lower cattle prices – largely due to the rapid drying off in seasonal conditions. Illustrating the fast finish to the export year, this year had the highest December on record, at 86,229 tonnes swt – 5% higher year-on-year.

Despite contracting 10% year-on-year, to 308,537 tonnes swt, Japan easily remained Australia’s largest beef export market, taking 32% of all beef exported. The weak Japanese economy, faltering consumer demand, the high A$ and increased competition from the US all combined to affect Australia’s trade throughout 2012.

While the US was the second largest market for the year, at 224,007 tonnes swt, the 33% year-on-year increase was off a very low 2011. Putting 2012 in context, Australian beef exports to the US between 2000 and 2010 averaged 312,000 tonnes swt, peaking at a record 397,678 tonnes swt in 2001 (when the A$ traded around 50US¢). The rise in Australian exports to the US in 2012 was largely due to a reduced supply of manufacturing beef in the US, record high prices (in US¢/lb terms) and reduced buying from Russia (for manufacturing beef).

After a very slow start to the year, Australian beef exports to Korea finished the year at strong levels. Exports for the year totalled 125,957 tonnes swt – down 14% year-on-year, after being down as much as 32% after the first six months of the year. The combination of increased Korean beef and pork production, competition from the US and a slowing Korean economy impacted demand for Australian beef throughout the year.

A 4% increase in exports to Taiwan throughout the year, to 38,281 tonnes swt, saw it move back to being Australia’s fourth largest export market in 2012. However, its move up the rankings was largely due to significant declines in exports to Russia (34,954 tonnes swt, down 37%) and Indonesia (27,096 tonnes swt, down 32%). The fall in exports to Russia was primarily due to a loss of price competitiveness of Australia beef, as currency movements resulted in Brazilian beef being much more attractive for Russian importers. The 32% decline in beef exports to Indonesia for the year was largely due to the limited availability of import permits.

Rising very quickly throughout 2012 to challenge Taiwan and Russia, and surpass Indonesia, in terms of volume, was China. Assisted by strong demand and reportedly tightening local supplies, Australian exports to China exceeded all expectations during the final five months of the year, bringing the 2012 total to 32,905 tonnes swt – up 324% on the previous year.

An increase in access for Australian grainfed beef contributed to a 16% rise in exports to the EU for the past year, totalling 14,087 tonnes swt. Despite a 3% year-on-year decline, exports to the Middle East largely consolidated on the growth of previous year, totalling 31,325 tonnes swt.

Overall, Australian beef exports for the year continued the trend of the past five years, with a record percentage and volume of beef going to markets other than the big three of Japan, the US and Korea. In 2012, 31.7% of total exports, or 305,277 tonnes swt of beef went to markets outside of the big three, compared to 30.8% in 2011 and only 8.6% (78,115 tonnes swt) in 2005.