Australian carcase lamb exports comparison

source: DAWR figures
In spite of a loss of market in Bahrain due to withdrawal of a government subsidy on lamb, Australia continues to ship very good quantities of carcase lamb of various specifications to markets in Middle East and USA. Middle East dominates and USA takes a significant volume of lamb in carcase form. It is still the most significant cut of lamb exported. Volumes in 2016 near level with 2015.

Australian farms and mapping technology

There is plenty of dialogue about the importance of farming to Australia.  It is also apparent there is a deal of ignorance and a substantial lack of data. But, give credit where it is due, Geoscience Australia and the Australian government agencies have done a wonderful job with the National Map of Australia and the homestead data.
The Australian Bureau of Statistics addressed the sector in a release this week
Agricultural Commodities ,below is their static map. Putting a value on these businesses produced an impressive figure. "Value of Australian farm production rises to $54 billion".

While the scale is small, each dot and concentration represents a farm business.

The National Map of Australia, including the homestead data set, looks like below:

National Map of Australia

The sale of Anna Creek Station (ex Kidman) to the Williams Cattle Company suggested a closer look at the location on the National Map.

The Williams Cattle Company have an impressive string of properties north of Anna Creek along the Oodnadatta Trak. Remote and challenging seasons wise but currently enjoying a very productive period.

Trends in retail meat prices China

When WH Group China released its prospectus for the takeover of USA Smithfield Foods in April 2014, they looked at the massive size of the Chinese pork industry and potential rises in per capita pork consumption. Chart below:

While the growth in Chinese pork consumption in the mass market has grown, a number of factors including the industrialization of the pork processing industry have impacted on the trade.

China Yurun Food Group, another pork and processed meat listed company, recently highlighted some industry trends in their interim report for 2016.

"However, in the first half of this year, affected by factors such as tight market supply, hog prices rose rapidly and increased significantly by approximately 48% compared to the same period last year to approximately RMB21.4

per kilogram, being the highest price in the past 5 years. 

During the Review Period, pork production in China amounted to 24.73 million tons, representing a decrease of 3.9% over the same period last year. During the Review Period, the number of live hogs production of China was approximately 402 million heads, representing a decrease of 3.7% over the same period in 2015; the number of hogs output was approximately 320 million heads, representing a year on year decrease of 4.4% as compared to the same period last year. As the hog farmers’ incentives to rebuild inventories resumed gradually and the supply should improve steadily, pork prices are therefore expected to decrease in the second half of 2016." In late November, the Ministry of Agriculture published their wholesale meat price trends and pork was quoted at 22.99 CNY per kg, 2.5% higher than 12 months earlier.

Pork is the largest meat consumed in China and prices are higher than chicken. Agriculture China latest wholesale price on slaughtered chicken is CNY14.40 per kg. That is equivalent to AUD S2.80 per kg.

Far higher prices for beef has seen some consumer resistance in the slowing conditions in the China market and Agriculture China latest (Nov 27 2016) wholesale price for beef is CNY 53 per kg, 1.9% down on the same month in 2015. Mutton prices have fallen a far more significant amount of 6.9%.

Retail price trends in China since 2013 shown below indicate the trend down in mutton prices, clearly separating from the level of beef over several months.

After the booming growth in the Chinese sheep meat market in 2013, with a jump of almost 40% in mutton retail prices along with sharp upturn in beef prices, mutton demand and prices have adjusted to more historical differentials with beef. Australian sheep meat exports to China have dropped from 97.423 tonnes in 2013 (MLA, DA) to 60,220 tonnes in 2015 annual and further adjusted to 47,824 tonnes year to date to October 2016.

BMI Agribusiness report for China Q4 2016 very clearly shows the far more competitive landscape for China beef imports, with Brazil product surging.

According to Brazilian export statistics, Brazilian beef exports to China Jan-Oct, have jumped from 61,260 tonnes 2015 to 132,383 tonnes in 10 months of 2016. Brazilian beef unit prices have dropped 14% from levels in the first 10 months of 2015. However, Brazil has also seen beef exports drop and in November 2016, the total fresh frozen beef was 75,800 tonnes, the lowest level since Jan 2015.

Tracking Australian heavy lamb cutout indicator trends in USA wholesale market

With seasonal easing of Australian heavy lamb prices, the current indicator was reported as $5.19 per kg national. Prices for chilled Australian lamb racks have held up and lamb shortloin prices have firmed.

We use a composite cutout of chilled racks and shortloins and the balance frozen lamb cuts as reported by the weekly USDA imported lamb traded, part of USDA mandatory price reporting.

These are wholesale prices in USD. 2.5 million lbs of Australian and New Zealand lamb was reported by USDA for 28 November 2016 (1,133 kgs). 1,108 tonnes of Australian lamb was entered into USA in week 48 (26/11/2016). Only 293 tonnes of NZ lamb was entered the same week. Year to date Australian lamb entries into USA are up 10% to 48,476 tonnes. Australia has achieved 70% of total imported lamb entering USA and a great deal of this product would be directed to foodservice.

The indicative trends are showing improved margins for Australian lamb as seasonal Australian lamb prices ease. Prices all is AUD$.

While there has been some easing in USA lamb prices reported from scan data to September 2016, unit prices have held up well considering the huge stocks of beef and pork in cold storage and volume of protein hitting the market. Unit value for Sept 2016 for all lamb at US retail was USD$7.35lb.(AUD$21.75 kg)

IMF bail out of EGYPT

The IMF has just announced a bailout of the Egyptian economy entitled: A Chance for Change: IMF Agreement to Help Bring Egypt's Economy to Its Full Potential

"Political instability, regional security issues, and the global economic slowdown have negatively affected the Egyptian economy, amplifying its long-standing structural problems."

Australia's trade with Egypt is provided in the Department of Foreign Affairs and Trade fact sheet. Meat is the third most important Australian export to Egypt after wheat and vegetables. Annual trade of meat $49M, excluding beef.

Current Australian exports for the 9 months ended September by meat type and cut are shown below. The largest items currently include beef livers and beef hearts. Brazil is a major exporter, as is India with buffalo.

USA market for imported lamb

USDA released their detailed US slaughter figures . These show that US commercial sheep and lamb slaughter has trended downward since 1990. A record low commercial sheep and lamb slaughter of 2.16 million head was recorded in 2011. Since 1990, commercial sheep and lamb slaughter has declined 60 percent. Commercial average sheep and lamb live weights steadily increased from 1990 to 2000 and have leveled off since that time. A record high of 143 pounds was recorded in 2012. In 2015, commercial sheep and average live weight was 136 pounds, 11 pounds higher than 1990. This has provided an opportunity for expanded lamb imports, particularly from Australia.

For the period to Oct 21 2016, Australian lamb imports have increased 12% 42,651 tonnes. Overall USA lamb imports including New Zealand have increased 9%. Food service demand is where the Australian product shines and prices have been on a steady uptrend since the early part of 2016. The cutout below indicates potential margins of up to $70 AUD per head on heavy Australian lambs tailored for the USA market.

Grain fed manufacturing beef exports increase in face of fall in grass fed beef exports

Australian grain fed beef exports and, especially manufacturing beef, continued to increase in 2016 for the 9 months to September, compared to the same period in 2015.

Volume for the 9 months in 2016 was 38,190 tonnes compared to 34,269 tonnes in the same period of 2015. 65 chemical lean *S* cipher was the main category.

Update on Korean beef market

Hanwoo cattle

Statistics Korea published a Q2 report on livestock statistics which showed that Korean native and beef cattle numbers rose 0.6% to 2,742 thousand head, compared to the same quarter in 2015.

Trends in Korean livestock numbers  - Statistics Korea

While cattle numbers have edged higher the longer term trend is that beef production is not keeping pace with consumption.

Statistics Korea report that although costs of production of domestic Korean cattle have eased, imports from Australia, USA and New Zealand will be of great importance to the Korean local beef supply availability.

KITA figures show fresh, chilled and frozen beef import values jumped 13.2% in August 2016 compared to August 2015. 37,061 tonnes total beef imports were recorded for the month of August 2016 and year to date imports are already 248,205 tonnes for the calendar year to August. Year to date average unit value is US$5.68 per kg. and August import unit value for beef imports was US$5.66 per kg. 

The latest USDA FAS Korean livestock report predicts that Korean cattle numbers will likely be unable to hold at current levels due to uncertainty about prices and costs. The USDA forecast the Korean calf crop will go into its third straight year of decline in 2017. Lower US beef prices as well as a lower duty rate will assist US beef exports to increase their share of the market. The same report notes the USA duty will be  24%, compared to 29.3% for Australia and 32% for Canada in 2017. Australia shipped 113,904 tonnes in the year to August 2016 compared to 105,845 tonnes for the same period last year.

American Protein Power

Cheap grain, large integrated processors, a huge home market and relatively weak currency - all the ingredients for a rebound in exports and sharply improved competitive position.

The latest weekly USMEF  report noted that beef exports were 17,400 tonnes, a marketing year high and the highest since 2012. Very low US grain prices and vastly more competitive beef export prices have driven aggressive expansion in all markets, some with high double digit growth such as Japan, Hong Kong, Mexico, Canada and Taiwan. Lower Australian prices have allowed Australia to hold its market share in Korea.
The USDA AMS weekly livestock, poultry and grain market highlights shows pork prices are down a further 7.2% from a low base and heavily depressed US cattle prices have seen the 5 area value fall to 24.5% less than last year at $105.02 per 100lb liveweight. Year to date pork production is even but beef production is up 4.8%. USA wheat prices are sharply lower and corn and sorghum prices are around 11-15% down on last year. Commentators in USA have noted that cheaper grain certainly helps the USA to power its intensive protein industries but producers are not enjoying the very low returns. The ever expanding poultry production, up a further 2.3% year to date, has seen national whole broiler chicken prices maintain last years level of just over US80 cents per lb, well below the 5 year average price recorded by USDA.

USDA AMS report  Japan beef imports increasing a modest 1% year to date but USA share has risen sharply by 20%, with Australia sagging 7%. USDA also show the USA making great strides in exports to Korea, but the overall market has been growing as distinct from a deflationary environment continuing in Japan. No doubt low priced USA pork is helping to drive growth in USA market share in the Japanese market but the growth in China is a hugely impressive 185% year to date lift for American pork. 

Spectacular price competitiveness of USA beef in Japan is highlighted by reports of the Japanese Meat Trading Center charts for 3 year price trends for the most popular US beef items, chilled and frozen beef short plate and chuck eye roll.

Chilled and frozen short plate. US chilled short plate prices in September are down 36% from the peak levels at Y711 per kg. US frozen short plate prices are currently Y635 per kg, down from earlier in 2016 and down a whopping 40% from the peak levels.

Latest USDA ERS forecasts indicate a 13% lift in beef exports in 2017 compared to full year 2015. US pork exports are well over double US beef exports and 2017 is forecast at 5,300 million lbs, up 6% on full year 2015 or 291 million lbs (132,000 tonnes). Even more impressive, is that USDA ERS forecast total USA red meat and poultry production will reach 100,241 million lbs in 2017, compared to their estimate for 2016 of 97,552 million lbs in 2016 and 94,630 million lbs in the last full year of 2015. Going past 100,000 million lbs of red meat and poultry production will provide a mega total of 217.6 lbs per capita consumption in 2017. While a few advertising insiders get their rocks off at expensive award events in Australia, the USA protein sector is a massive engine with the resources to blast high cost producers like Australia off the competitive map.

Korean officials receive Brazilian trade delegation with an eye to beef exports

Brazilian minister targets Korean market for meat with initial success with Brazilian pork. It is expected that once Korean officials visit Brazilian pork processors, trade could commence in early 2017. In addition, the Brazilian are pushing hard for admission of Brazilian beef as noted by the trade association. "But the Minister Blairo asked the Korean government immediately initiate the process of approving the importation of Brazilian beef. He recalled that Brazil has just received approval from the US government, and is a traditional supplier of the European Union, which are among the most demanding markets in the world." KITA trade statistics indicate Korean fresh and frozen beef imports are running strongly in 2016 with increases in US$ value ranging from 13-17% higher than the same months in 2015 for June, July 2016.

Korea imported 620,000 tonnes of pork in 2016 and so far in 2016, pork imports total 372,000 tonnes. Korea imported 295,000 tonnes of beef in 2015 and so far in 2016, the rate of import has increased rapidly to 211,000 tonnes for only 6 months.

Global pork producers, importers and exports - a Brazilian perspective

Brazilian Association of Animal Production represents both pork and chicken processors and exporters.

While China leads pork production, EU follows and the EU is also a major pork exporter. Japan is the leading global importer of pork followed by the rapidly growing China market. USA is the largest pork exporter.

Middle East sheep and goat numbers

Data collected and published in the Arab Agricultural Statistics Yearbook 2014 is the latest data available and the combined group of countries have
 91 million goats and 184 million sheep.

This compares with ABS statistics for Australia published in Dec 2015 which showed Australia had a sheep and lamb population of just under 70 million head. "Sheep and lamb numbers continued to decline due to dry seasonal conditions across eastern Australia and increased slaughtering rates. Total sheep and lamb numbers dropped by 4 per cent from 2013-14 down to 70 million head. NSW had the greatest number of sheep and lambs on holding, with 26 million head followed by Victoria with 14 million head."

Canada sheep and lambs update.

According to USDA recent data, as of July 1, 2015, Canada’s total sheep and lamb herd equaled 1.04 million head. This was down 2.8 percent from one year ago and was down 5.3 percent from two years ago.
Alberta Lamb

The largest concentration of Canada’s sheep herd was in the province of Ontario with 321,000 head, or 30.8 percent of the total. This was 2.5 percent lower than one year ago. The province with the second greatest number of sheep was Quebec with 240,000 head, or 23.0 percent. This was 4.0 percent less than the previous year. During the first half of 2016, Canada’s sheep slaughter totaled 90,088 head, which was 14.7 percent higher than one year ago and was 8.0 percent higher than two years ago. http://www.statcan.gc.ca
Canada has supplied only 39 tonnes of lamb to USA in 2016. Other small suppliers are Iceland 360 tonnes, Chile 139 tonnes. The USA market is dominated by Australia with imports of 31110 tonnes of lamb in 2016, a solid 18% increase, year to date. New Zealand has supplied 14,424 tonnes up 6% year to date. Australia exported 4,017 tonnes to Canada in the year ended June 2016, slightly down on the 2015 figures with more going to the East Coast Canada in 2016 and lower volumes to the Canadian western states.

Columbia resumes import of USA cattle

After 13 years the Colombian Agricultural Institute, ICA, closed the importation of cattle from the United States to Colombia, entered the first 19 head  from that country to contribute to the genetic improvement of livestock Colombia.
Columbia imports US cattle

Tracking yield weighted Australian beef retail prices and producer share

The surge in Australian young cattle prices and the competition from other protein, particularly chicken, has seen average retail beef prices tracking at levels which see the estimated Australian producer share climb to previously unseen levels in our records.

In order to reflect a realistic average retail beef price, a major supermarket weekly catalogue is used to generate a carcase yield weighted price. This is tracked over time and a producer share is calculated by comparing the carcase weight retail price with the Eastern Young Cattle Indicator published by Meat & Livestock Australia Ltd.

Colombia sees a 3.4% drop in Q2 2016 cattle slaughter

During the second quarter of 2016 , 931,943 cattle were slaughtered , representing a variation of -3.4% compared to the same period of 2015 where 964,838 head were slaughtered and a variation of -1.3% was recorded. Slaughter of male calves showed a variation of -9.1% and -0.9% respectively, while the slaughter of females had a variation of 0.5%. In turn, the slaughter of cattle destined for export registered a variation of 222.9% from 7,838 heads in the second quarter of 2015 to 25,305 heads in the second quarter.

It is notable that there was a substantial increase in cattle slaughter for export from Colombia.

By department , the biggest shares in the slaughter of cattle in the second quarter of 2016 were recorded in Antioquia (17.9%) with 167,124 head, Bogotá1 (16.6%) 154,933 head, Santander (7.8%) 72,851 head, Valle del Cauca (6.5%) Meta heads and 60,175 (5.8%) 54 238 head.
Detailed report is here. (Spanish) . The terms of slaughter intended for export presented a variation of 209.0%, 53,692 head were slaughtered in the second quarter of 2016 and the same period last year 17,377 head.
The slaugther of buffaloes recorded change of 32.6% from the first half of 2015 was 44.8%. By sex, females presented the slaughter variation of 88.3% and 22.2% males. Almost 4 million head of cattle were slaughtered in 2015. The figure for first half 2016 is 1.87 million head. A range of data indicates Columbia is in the top 10 in terms of global cattle inventory. An MLA report in 2016 indicated Colombia cattle prices were similar to Peru at around US$300 per 100 kg liveweight sold.

Sudan has the highest sheep meat consumption per capita according to OECD

The figures are for 2015 and the OECD figure for Sudan for sheep meat per capita consumption is 10 kilograms.

OECD report
It seems like demand is strong as the Mayor of the town of Wau has ordered a meat price reduction. Another article refers to a price of 50 pounds being mandated compared with 120 pound in the market. The FAO price tool does not include a mutton price in its database. However, the Gedaref State, Sudan State Food Security Technical Secretariat (SFSTS) report from January-March 2016 refers to SDG 60 per kg which is equivalent US$9.88 per kg.

New specialty steak cut, the Bonanza Cut, unveiled by meat science professor

The small, quarter-moon-shaped slice of beef that has a taste and tenderness that outclasses any other cut except filet mignon made its debut this week for media, meat industry representatives and University officials in a private tasting.
http://naes.unr.edu/demello/
De Mello started developing this new cut in 2014 while working for the beef industry. With support from JBS, a world leader in processing of beef products, he conducted research on the cut at the University beginning in 2015 and found it compared extremely well against other cuts of beef.

The objective of the experiment was to evaluate tenderness and cooking yields of the m. infraspinatus caudal tip (the very far end of the flat iron steak) and verify the opportunity of exploring this cut as an added-value product. Research found that the Bonanza Cut has superior marbling and higher fat content compared to other meat cuts, including the flat iron steak.

"Meat processors will like this specialty cut for a number of reasons, one because it's very easy to trim," de Mello said. "When you separate the chuck and the ribs, the Flat Iron steak goes one way - with the Chuck - and the relatively small end stays with the rib side; this is the Bonanza Cut.

"The industry will also like it because instead of selling it for $1 a pound as lower quality meat, they can showcase it for what it is, a premium cut worth more like $5 a pound."
http://www.unr.edu/nevada-today/news/2016/the-bonanza-cut

http://naes.unr.edu/demello/bonanza_cut.aspx

Australia sits on top of global cattle price tables

Australia has gone from the bottom to the top of the price tables in 4 years. It is hard to believe the low level of prices in 2013 at only AUD$629 per head. We equate values by converting to Australian dollars and then use a 280 kilogram carcase to compare values. USA, Canadian and European cattle prices are well down in 2016 and the comparison is made in August of each year.

Russian foodservice market contracts in 2016

According to the Russian Federal Statistics Service (Rosstat), turnover of restaurants and cafes in Russia fell by 5.5 percent to 1.3 trillion rubles in 2015. In the first half year of 2016, turnover of restaurants, cafes and bars fell by 3.7 percent to 615.9 billion rubles in comparison to the same period of 2015.

An article in Russian media noted: turnover in the second quarter of this year - by 2.5%, to 321.1 billion rubles. Rosstat is the agency that published detailed data on the Russian economy. According to Rosstat, Russia's GDP has been declining for six consecutive quarters. Since the beginning of the crisis, the Russian economy has lost 5.5% of GDP. In the first quarter of 2016 Russian Nielsen Consumer Confidence Index fell to record lows. Further details in a range of matters in food are in the USDA FAS GAIN report released 15 August 2016.

Brazilian state Mato Grosso sees big fall in shipments to China

China, which has been the largest purchaser of Mato Grosso meat, decreased in June, turnover in 61.9% "in the collection, on-month." The IMEA - Mato Grosso Institute of Agricultural Economics - believes that it is a "strange particularity in minimal" and that the reduction of purchases by the Chinese generated "concern to the market." The devaluation of the dollar against the real (passing from 20% in January so far) "negatively affected Brazilian exports" and meat sales abroad are having "negative growth since May." Sales last month were 0.67% lower than in June. "It is the smallest value obtained from 2013 in a month of July."

Business were $ 71 million (in 2015 was 97 million dollars) and last month 72 million. World Beef Report noted: China show recovery signs but negotiations are hard. The Chinese beef market “is not yet adapted” to the prices required by the Mercosur industry. Operators working in that market coincide that demand show signs of recovery but that are not yet transferred to prices. A trader reports a shipment of shin & shank from Uruguay at US$/t 4,900 CFR, 5+8 rib at US$/t 3,200 CFR and knuckle at US$/t 4,800 CFR. Brazilian fresh beef sales to China sunk to 3,495 tons swt in July, the lowest volume in the trade current since June of last year, when China reopened its market for Brazilian fresh beef. A worse competitiveness of exporters due to a currency revaluation, the problems of Chinese importers to accept the prices asked by exportation and improvements in other markets that compete for the same cuts, like Russia, were the reasons for such a sharp fall.

FAO - Technical advances could be the key to progress in the Puerto Rican livestock industry

"Puerto Rican livestock producers of beef only represent a10% of this market, despite the huge potential for growth", said the president of the Farmers Association, Héctor Iván Cordero."This is an industry that, if given the attention it needs, has a bright future," he pointed out.
FAO maintains a service to cover Latin America and the Caribbean. The full publication in Spanish is here. "What has to be done is to standardize the industry and bring about the changes through regulations. The most important livestock sector in Puerto Rico is the milk. It represents 25% to 29% of the agricultural gross income although in recent years has been in decline. The meat is not in the same place because it is a sector that has not been properly exploited, but the potential is tremendous, "said the president of the Farmers Association. According to the last agricultural census of Puerto Rico, made in 2012, on the island there are 2,276 farms with beef cattle. In these there are about 96,000 head of cattle, representing an increase of 30% compared to 2007.

USDA and ICRA India reports - India Buffalo Exports

USDA article: From Where the Buffalo Roam in June 2016 set the scene.
ICRA India followed in August 2016 with an article.

Courtesy ICRA

Recent figures indicate some shrinkage of the Indian buffalo market segment but huge shipments to Vietnam and Malaysia, in particular, continue.
FAO produced an earlier report, which is online in full, The report also includes some interesting photographs.
A very interesting USDA ERS chart indicates the competitive nature of Indian buffalo in terms of competitor pricing.

Australian meat export unit values ease in June quarter 2016

Australian beef export unit values are down from the peak level but still remain within historical high levels.

The 6 period moving average is now around AUD $7 per kg FOB. The figures are derived from ABS beef export volumes and values published in the last month.

Russian beef market collapses for Brazilian exporters

Latest figures published by Brazilian organisation ABRAFRIGO show that for the 7 months ended July 2016, Brazilian beef exports to Russia dropped 25% in volume and 38% in value. Unit value was a rather low figure of US$2,814 per tonne in 2016 on volume of 77,743 tonnes and US$218.8 million sales. Jan-July 2015 unit value was US$3,380 per tonne.

Latest USDA FAS report noted "In 2016 beef production is forecast to decline 3.3 percent to 3.310 MMT CWE as cattle inventories decrease 1.6 percent due to stagnation of the Russian dairies which supply most cattle for slaughter. The forecast for beef imports is 630,000 MMT CWE, flat year-on-year. Imports account for 32 percent of total beef supplies and push prices up while beef consumption will decline by 2 percent after a 14 percent drop in 2015"

Record high young cattle prices in Australia see producer share 67%

Based on yield weighted major supermarket catalogue retail prices and calculating cattle producer share based on a carcase weight adjusted price per kilogram, Australian producers are enjoying a record share of the retail consumer dollar.

Vietnam is the major market for Indian buffalo

Vietnam purchased over 600,000 tonnes of Indian buffalo in the 2015-2016 reported year. Value of US$1.9 billion at a unit value of US$3,293 per tonne. An article published over 12 months ago in Chinese media indicates that a proportion of the "grey" trade (smuggled meat) came via Vietnam.

Data sourced from the General Statistics Office of Vietnam shows the decline in the Vietnam domestic buffalo herd and the trend down in recent years of the cattle herd.

In the 7 months of 2016 Australia exported a total volume of 3,984 tonnes to Vietnam, mainly beef and beef offals. It is likely that a proportion of this trade finds its way via the grey channel into China.

Vietnam is a huge market for Australian live cattle exports with almost 283,000 head shipped in the fiscal year ended June 2016, compared to 304,000 the previous year. The market and trade has been plagued by adverse publicity and supply chain breaches. The record published by Agriculture Department dates back to 2013 for Vietnam. Investigations 106 and 104 are still in progress. A breach notified in February #97 was covered in a first part of year release.

India exported meat worth USD 568 million in April-May

Indian Express online reported the export earnings of Indian meat exports in April - May 2016 of US$568 million. However statistics from APEDA indicate the unit value of buffalo meat fell from US$3,147 per tonne to US$2,887 per tonne, a drop of 8%. Unit values have been falling each reporting year since 2013-14 and unit values are now down in the leading export market of Vietnam from US$3,425 per tonne in 2013-2014 to US$3293 in 2015-2016 reporting period. Overall volumes also fell in 2015-2016 to  1,314,158  tonnes, down from 1,475,526 tonnes  in 2014-2015. All market unit value in 2015-2016 was US$3,096 per tonne. Vietnam and Saudi Arabia are higher value markets and clearly very important to India and APEDA has announced a visit of the Indian Prime Minister to Vietnam next month. Indonesia has approved import of Indian buffalo but there is some resistance by Indonesian cattle producers concerned with quarantine, biosecurity issues.

USA lamb retail performance impressive - Australian lamb arrivals up 19%.

The US Beef Board publishes detailed sales and volume figures on a monthly basis and the 12 months figures to June 2016 are now available on the Beef Board site.

Annual retail sales of lamb amounted to US$407 million in 2015-2016 year ended June, a rise of 4.7%. Volume of lamb sold in the 12 months to June was 57.3 million lbs (25,990 tonnes), a jump of a healthy 6.7%. These are retail sales scan data sourced from FreshLook data, categorized by the VMMEAT® SystemFive Weeks Ending 06/26/16. The USA lamb market continues to perform better than remainder of the meat category including beef, pork, chicken and turkey. There was a 1.6% drop in the average lamb retail price to US$7.10 per lb, with the average retail price well in excess of beef, pork and chicken at retail. Beef average price was US$5.06 per lb. Australia exported over 53,000 tonnes of lamb to USA in the 12 months to June 2016. Australia has done particularly well in relation to lamb arrivals in USA and up to week 31 2016, tonnage equaled 34,070 tonnes, 19% higher than the same period in 2015. Australian lamb is now almost 2.5 times greater in volume of arrivals in USA year to date compared to New Zealand lamb and accounts for 73% of total imported lamb arrivals.

OECD FAO sheepmeat imports projections

The OECD FAO projections released in July 2016 includes a focus on meat. The data visualization above shows the size of the world sheep meat market by regions. (OECD (2016), "Meat", in OECD-FAO Agricultural Outlook 2016-2025, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/agr_outlook-2016-10-en) The projections indicate the rise in developing countries sheep meat consumption compared to production in those countries. The differential is projected to rise to 817,000 tonnes carcase weight by 2025. This is an additional 174,000 tonnes. Per capita sheep meat consumption by selected countries and regions are provided in a spreadsheet.

Paraguay Chile meat export update

Chile has been a major market for Paraguay exports.

USDA FAS report in March 2016 notes: Chile’s beef imports come mainly from Mercosur countries (Argentina, Brazil, Paraguay and Uruguay). In CY2015 beef exports prices from Mercosur countries were 8% lower than 2014, Paraguay had the lowest price from these countries and the highest reduction in price (11%). This price reduction has to do mainly with lower prices paid by Russia (major beef destination from Mercosur), Chile and Brazil. Paraguay was the main supplier of beef, but had an outbreak of “food and mouth disease” on “2011” which lowered its participation on Chilean Market; Paraguay has been recovering since then and has regained its position as the main beef supplier for Chile. Brazilian beef exports to Chile have been favored by a high depreciation of their currency (Reais). In January 2016, Chilean total imports of beef were 11.5% higher over January 2015, which breakdowns to 32.2 % increase from Paraguay, 4.7% increase from Brazil and a 5.1% increase from Argentina (based on ODEPA 2016 statistics). Chile data indicates Jan-June 2016 value of fresh chilled boneless beef imports were valued at $346 million, slightly above the previous year.

Australia ships a small quantity of beef and beef offals to Chile

USDA FAS reports Paraguayan beef exports in 2016 are forecast 435,000 tons carcass weight equivalent (cwe). This record is expected as a result of increased beef output and a steady foreign demand. Paraguay continues to expand cattle grain feeding taking advantage of low feed costs and high cattle prices in dollar terms. Domestic consumption in 2016 is projected at 187,000 tons cwe, marginally higher than the past few years. Paraguayans are increasingly demanding higher quality beef cuts. The EU resumed imports in May 2015. The World Beef Report recently reported Paraguay steer prices lower than the Mercosur average and shown at US$2.76 kg carcase weight.

Australian meat export price index trends

Australian meat export prices surged over 47 index points throughout 2013 and 2014 to their peak of 147.8 in the September quarter 2015. Prices have corrected since that time with a loss of 17 index points and almost 10 points lost between Dec quarter 2015 and June quarter 2016. Today's release of the ABS trade figures for June 2016 saw beef export values for the year ended June drop to $8.5 billion AUD, down 6% from the fiscal year ended June 2015. Volume and values have contracted but export meat prices remain at historically high levels.

History of the Russian ban on Australian meat

Australian Department of Agriculture meat notice 2014-05 confirmed the relevant ban which excludes sheepmeat, goatmeat and offals of those species. The ban has been extended and total beef exports to CIS (Russia) as recently as the fiscal year ended June 2013 were 24.372 tonnes. The Russian publication TASS reported analysts estimate losses of Western countries from sanctions at $60.2 bln. Australia has managed to continue to supply quantities of sheepmeat, goatmeat and relevant offals. Year to June 2016 figures below.

Exports of sheepmeat to Russia in the fiscal year to June 2016 are less than half the level of 6,088 tonnes to CIS for year end June 2013. A publication estimates the losses to a range of supplying countries of the EU. A Reuters article last week indicated Russia in efforts to remove sanctions imposed by the EU.

Argentina positioning its meat trade for future growth

After some years of confused and sometimes counterproductive policies, the government of Argentina is seeking to boost its meat export efforts. "Under the Seminar Carne Argentina 2030, Livestock we all win, organized by the Institute for the Promotion of Beef Argentina (IPCVA), members of the Consortium of Meat Exporters Argentinas ABC exposed on the prospects and main challenges meatpacking industry for the next decade." News article "2025 show an increase in the slaughter of 29%, reaching 16 million head, and an increase of 47% in production, projected at 4 million tons of meat. In terms of consumption, it would remain stable at 2.5 million tons, and expect exports will reach 1.5 million tons, representing 7.000 billion. In this way, our country would be among the top 5 exporters of beef. "

June export values dropped 21% from June 2015 according to IPCVA. "the average price per ton FOB was approximately us $ 9,400 for chilled boneless cuts; and us $ 4,450 for frozen boneless cuts. "

"China was the main destination, in volume, for meat Argentina vaccine during the first six months of 2016 with approximately 26,2 thousand tons, followed by Israel, 11,300 tons; and then by Germany, 11.0 thousand tons. As for the value of the foreign exchange, the main market for the period from January to June 2016 was Germany, which accounts for (28%) of the value total exports of chilled beef, frozen and processed in the period, followed by China (21% of total), and Israel (14%)."

Rapid rise in Korean beef imports first half 2016

Figures released by the Korean International Trade Association show the volume of Korean beef imports jumped 31% January to June 2016 compared to last year.

January to June values jumped 17%. Unit value in June was equivalent to US$5.70 per kg, slipping from the 6 months to June average unit value of $5.75 per kg. The annual unit value in 2015 was US$6.15 per kg. June 2016 beef imports from Australia totalled 15,245 tonnes and USA 12,812 tonnes. Australia was 52.4% of total Korean beef imports for first half 2016. USA was 39% of total first half imports.
Australian Jan-June 2016 beef exports increased 8.5% and the breakup of cuts is shown below.

Source: DA, MLA