In other beef news, producers in Australia are experiencing a boom with prices skyrocketing. Plus, they’re unloading cattle to adjust to the extreme drought conditions. At the Wodonga saleyards this week, local cattle sales were booming. It’s serving as a bellwether with the Australian beef export market booming. In April, Australia exported more than 127,000 tonnes of beef, a record for the month. The United States again became the largest recipient, importing 37,213 tonnes, with China a distant second at 21,572 tonnes.
The increases in export volumes increase due to a record supply of cattle as producers deal with continuing drought conditions. Tim Jackson, a global supply analyst for Meat and Livestock Australia, explains that the increase can be attributed to the abundant supply of cattle. This bump in supply was due to severe weather patterns.
Record Supply Drives Export Success
Katie Lewis, a southern plains cattle producer said producers are having to sell off portions of their herds because the drought has just lasted so long. This week’s prices at Wodonga are a very welcome sight for producers. She explained, “A lot of people have decided to bite the bullet, the money is good and they’ve decided to sell early.”
At Wodonga on Thursday, around 6200 cattle were penned, a record for May. Wagga Wagga experienced a surge in supply. On Monday, just under 8,700 head of cattle were counted there. The 2023 spring Wagga sale will feature close to 10,000 head. This is indicative of the pressure producers are under to start liquidating their herds.
The persistent drought sweeping the West has forced many farmers to make hard choices over how to husband their herds. “A lot of farmers that went through the process of feeding livestock last year have decided they’re not doing it again this year,” Lewis added.
International Demand Bolsters Export Figures
This has given a present boost to Australia’s beef exports, especially from overseas markets. Now, global trade dynamics are being upended by new geopolitical tensions. Consequently, China’s competitors in trades like South Korean and Japanese markets are increasing their purchases. This change more than makes up for increased Chinese imports, as China has significantly increased its purchase of Australian grain-fed beef.
This year, Australia has shipped about 42,000 tonnes of grain fed beef to China. This marks a staggering 36 percent increase from this time last year. Jackson remarked on the positive reception from international buyers: “There’s been good support from our friends in the north who have had a cracking start to the year and are here today buying.”
Even with these encouraging signs in exports, national cattle indicators have relaxed this week. The processor-cow indicator dropped 22 cents a kg this month, hitting the lowest point of the year thus far. Jackson said he felt confident that the success in exports would continue, even with these ups and downs.
Future Outlook Remains Uncertain
Though the current export totals look strong, there is some concern among analysts about what lies ahead. Jackson added that last year established record-high export and production levels in Australia. He’s hopeful that the industry is poised to find that same success again this year. Yet, he conceded that there are big question marks when it comes to the nuances of market forces.
“It’s difficult to say at the moment. These are fairly early figures and we’d need to wait for more information to come out and get a better understanding of that trade dynamic,” he commented.
With drought still affecting the entire producer community in Australia, the beef market is in a very dynamic state. Record supplies and changing international demand further complicate the scene for Australian beef exports. As they do, they have to overcome significant environmental challenges and geopolitical factors.
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