South American beef exports climb 5pc

29 Apr, 2009 02:27 PM
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STEADY export increases from the three major South American suppliers – Argentina, Brazil and Uruguay – should continue as the producing countries recover from the sharp drop of 2008.

A five per cent increase to 342,000 tonnes shipped weight has been recorded for the first quarter of 2009.

The improvement, which remains 13pc lower than the same quarter last year, comes after a plunge in exports in late 2008 after imports stalled as a result of the global financial crisis and currency exchange volatility.

Driving the market turnaround has been a steady increase in demand from South America’s main export markets Russia (taking 37 per cent of total exports) and the European Union.

Meat and Livestock Australia economist Tim McCrae said growth should continue, particularly due to Russia running down beef stock and the “financial situation becoming clearer”, but not necessarily better, he added.

Revenues however failed to benefit from the growth in demand and remained 20pc below in US$ terms as a result of a 24pc drop in average export prices; mainly influenced by the devaluation of South American currencies, major importers quoting lower prices and a shift in trade towards manufacturing and secondary cuts, MLA reported.

Russia’s suspension on Mexican meat product and meat product from several US states following the outbreak of swine flu will not necessarily impact on South American exports or cause a rapid shift in demand for Asutralian product, Mr McCrae said.

“We did see Australian exports jump considerably in Russia last year, but a lot of this was to do with Brazilian beef being at a high price and in tight supply.”

A predicted decline in Argentinean calf production (40pc), should also have minimal impact on Australian exports, Mr McCrae said.

The decline in production, due to severe drought affecting the south east of South America since 2008, low pregnancy rates and high female slaughter rates, has seen the Argentinean herd fall from 57 million head in 2007 to 52 million head, MLA reported.

But with Brazil’s capacity to sustain Russian growth, Mr McCrae said it would not “necessarily result in more Australian product into these markets”.

The decline in the Argentinean herd reflected a predicted decline in global beef production in the medium term, out to about 2015.

Australia’s production rate however, is expected to climb in the same period, putting it in a prime position to meet global beef demand, Mr McCrae said.

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