AUSTRALIA, North Sydney. Opportunities for Australian red meat appear limitless. However, free and open markets, meeting consumer needs and promoting our main points of difference are all vital to our industry’s future prosperity, says Michael Finucan MLA’s General Manager, International Markets.
The impact of drought conditions across many parts of Australia has forced many producers to turn-off stock, leading to year-on-year lifts in production in 2018, but not necessarily as elevated when compared to longer term averages. On a national level, year-to-July.
Adult cattle slaughter is up 10% year-on-year, but 6% below the five year average. Lamb slaughter is up 9% year-on-year and 8% above the five year average, but has contracted sharply in recent weeks with the delayed onset of new season lambs. Sheep slaughter is up 27% year-on-year and 2% above the five year average.
Last month MLA reported on the strong performance of the Korean market and looming likelihood of safeguard being triggered. Australia is now at over 95% utilization and safeguard will likely be triggered in the coming weeks. Imports of Australian beef incur a 26.6% within-safeguard tariff, which increases to 40% once triggered.
In comparison, imports from the US incur a 21.3% within-safeguard tariff – which means the tariff differential will expand from 5.3% to 18.7% for the rest of the year once Australia triggers safeguard - placing additional competitive pressure in the market.