Australia's Loss Is Brazil's Gain in Beef Exports

Brazilian beef Brazil's beef exports are forecast to rise about 5% during 2009. Higher exports should also happen in Argentina and the United States as these three countries outweigh downturns in Australian and New Zealand shipments, according to the US Cattle network

As the world's leading trader Brazilian exports are forecast to spring back nearly 5% to over 2 million tons. Shipments are projected to decline in 2008 for the first time since 1996. However, by overcoming sanitary barriers, it is now poised to regain sales to Chile, EU-27 and other key markets.

But continuing restrictions on imports by the EU-27 and high export prices prevent a more optimistic forecast.

In Argentina exports are forecast to expand 20% to 480,000 tons in 2009 after plummeting an expected 25% in 2008.

The rebound stems from the Argentine government setting a higher export quota, cattle and beef supplies not expected to be limited by farmer strikes, and thermo-processed product to be exported outside of the quota.

The United States continues to rebound from trade restrictions caused by BSE (Bovine Spongiform Encephalopathy). While currently nearly half of shipments are currently to Canada and Mexico, opportunities are expanding in Asian markets and thus exports are forecast to accelerate nearly 10%.

An agreement was concluded with South Korea on April 18, 2008 to fully reopen the market to all US beef and beef products consistent with international standards and the World Organization for Animal Health (OIE) guidelines.

However, in response to significant public outcry in Korea, in part fueled by misinformation regarding the resumption of US beef, Korean importers and US exporters reached a commercial understanding that only US beef from cattle under 30 months of age will be shipped to Korea, as a transitional measure, until Korean consumer confidence in US beef improves.

While US beef is being sold at small butcher shops, large discount chain stores have not yet decided to sell US beef. Once these stores make that decision, the pace of imports will pick up and more chilled beef will be exported.

Currently, almost all imports of US beef have been frozen beef shipped via sea. In 2003, approximately 15% of US beef exported to Korea was fresh/chilled.

Australian production is forecast to fall about 3% due to lower production that reduces exportable supplies and escalating competition in Japanese and Korean markets from the United States. Resilient domestic demand also puts downward pressure on exports.

In New Zealand reduced production and stable domestic consumption are forecast to reduce exports by nearly 4%, with shipments to Korea and Japan expected to be trimmed by growing competition from the United States. However, the composition of exports is forecast to start reflecting a higher percentage of manufacturing beef and thus shipments to the United States could reverse their downward trend.

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