Beef the big mover in Australian agricultural trade 

The Australian Farm Institute maintains a comprehensive agricultural trade database which is accessible by members through the Institute’s website. The database contains comprehensive information about international trade in the complete range of agricultural commodities, and importantly details the performance of competitor agricultural exporters, to provide a complete picture of how well Australian exports are competing in key markets. The database is updated annually as comprehensive international data becomes available, with the latest update detailing Australia’s agricultural trade performance for the 2013–14 year.

The most striking aspect of Australia’s agricultural trade performance during 2013/14 was the increase in the value of livestock product exports. The value of live cattle and beef exports in 2014 increased by 28% from 2013 (see Figure 1), while the value of live sheep and lamb exports increased by 23% over the same period.


Figure 1: Exports of Australian cattle and sheep products.

Source:  UN Comtrade.

The growth in exports was driven by the large drought-induced sell-off of cattle from northern Australia. In the past, such events have severely depressed cattle prices, and there was certainly some evidence of downward pressure on the cattle market as a result of the flood of numbers. However, in this instance prices were maintained by the relatively high level of demand for beef exports emanating from the United States (US), where the beef herd has been at a cyclical low level, driven in part by the sustained high corn prices which made feeding of cattle uneconomic.

Almost 400,000 tonnes of Australian beef was exported to the US in 2014, almost double the volume exported in either 2012 or 2013. As a result, the US overtook Japan to become the biggest market for Australian beef exports in 2014 (Figure 2).


Figure 2: Australian beef exports to major destination markets.

Source:  UN Comtrade.

Forty per cent of US beef imports were sourced from Australia in 2014 compared to around 30% in the previous two years. The US imported US$5.5 billion worth of beef in 2014 compared with an average of $US3.2 billion over the previous three years. In 2014, US imports of Australian beef were worth US$2.2 billion compared to an average of US$940 million over the years from 2011 to 2013. Over half (56%) of the extra 2014 demand in the US was filled by Australian beef exports.


Figure 3: Market share of US beef imports.

Source:   UN Comtrade.

The high turnoff of Australian cattle also resulted in Australia’s share of world beef exports increasing to 15% in 2014, two percentage points clear of the next largest exporter by value – the US. Notably, the value of US beef exports continued to grow steadily in 2014, at the same time that US beef imports increased by over 60%. This is, in part, a reflection of reduced agricultural trade barriers resulting in enhanced market access and increased product differentiation amongst beef products in global markets.


Figure 4: US trade of fresh and frozen beef products.

Source:  UN Comtrade.

This is a reminder that perhaps the economists are correct after all, and that the removal of agricultural trade barriers can bring benefits to all nations participating in global agricultural trade.

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