AUSTRALIA, Canberra. The long drought and political tensions with China weighed on business with overseas customers in 2020.
Australia's beef exporters were able to sell significantly less product abroad last year than in 2019, with exports totaling 1.04 mill. t in freight weight, down nearly 190,000 t, or 15.4%, from the year before, according to data from the country's Department of Agriculture. The last time exports were similarly low was in the middle of the last decade, when drought conditions also severely limited slaughter volumes and thus export supplies.
According to the industry association Meat and Livestock Australia (MLA), in 2020 the significant rise in cattle prices in Australia also affected competitiveness in international beef sales; in addition, sales to China, previously the most important customer, faltered noticeably due to political tensions. Exports to the People's Republic slumped by more than 100,000 t, or 34.5%, to 196,700 t compared to 2019 following the closure of several Australian suppliers. As a result, Japan became the new main buyer of Australian beef with 269,300 t. However, this market also saw a decline in exports, which amounted to 18,200 t or 6.3% year-on-year.
In addition, beef exports to the US decreased by more than 40,000 t, or 15.9%, to 211,750 t; this was one of the weakest results in the past 30 years. According to the MLA, exports of the predominantly supplied processed beef for burger production in the United States really collapsed in the second half of 2020 as many fewer cows were slaughtered in Australia and their high prices made it difficult to bid competitively. Beef sales to Indonesia, Taiwan, Saudi Arabia and the Philippines also fell by double-digit percentages, while export volumes to South Korea and Canada held just about steady with last year.
The MLA expects the effects of the drought and destocking in Australia to continue to negatively impact export supply over the next two years. Normal export volumes of around 1.2 mill. t are not expected again until 2023.