Australia points to growing importance of US for beef and lamb exports
He was also optimistic that Australian lamb exports would grow, with marketers tapping demand from the significant proportion of Americans who rarely or never eat lamb, he said.
"So far in 2014, the US is Australia’s largest beef export destination, with 153,796 tonnes (t) shipped in the first six months, compared with 132,075t to Japan, the second-largest market," said McRae. This US increase is 29% higher than in the 2013-14 fiscal year ending 30 June, he added.
The growth is triggered by low beef production in the US, particularly lean beef used in hamburgers and other mince products. "The US cattle herd is at a 60-year low after a prolonged drought in key cattle areas, which is making domestically produced cattle and beef very expensive," McRae explained. "US importers are offering higher prices than buyers in other markets, including, to some extent, Japan."
But this rise may be short-lived: "The growth in exports to the US is unlikely to be sustained in the coming years," McRae said, adding, "Australian exporters will probably even find it difficult to maintain current volumes."
One reason for increased Australian beef production in 2013 and 2014 has been increased slaughterings prompted by drought, so "it should slow with improved rainfall and pasture growth in the key cattle areas of Queensland and New South Wales", said McRae. Total beef production is expected to decline sharply in the next few years, meaning there will be less beef available for export.
Communications and stakeholder relations manager for the Cattle Council of Australia Mary Johnson agreed: "Cattle herds in both US and Australia are low, due to drought." But she said there would be longer-term demand in the US for Australian grass-fed beef. "The majority of Australian cattle are completely grass-fed, providing a differential between the Australian and American beef industries," said Johnson. "Indications show that the demand for Australian beef will continue in the US as consumers continue to seek grass-fed beef," she added.
As it stands, Meat & Livestock Australia forecasts beef exports to the US at 285,000t in 2014 – a 34% increase on total 2013 volumes – and 280,000t in 2015, said McRae.
Compared with beef, Australia’s lamb exports to the US are still very low: in 2013, Australia exported 39,180t of lamb to the US; 39,535t to China; and 59,777t to 15 countries in the Middle East. But values are high: "The US generated [Australian dollars] AU$349 million [US$328m], China AU$179m [US$168m] and the Middle East AU$330m [US$310m]," said McRae. He noted that a much "higher proportion of lamb exported to the US is high-quality legs, racks and shortloins compared with the other markets".
And the US has been Australia’s largest export market for lamb for a number of years, although exports to the Middle East and China have increased significantly in the last five to 10 years, he noted.
That said, annual lamb consumption in the US is still low at around 400g to 500g per capita with compared with 9kg to 10kg per capita in Australia, McRae said. Also, lamb consumption is concentrated on the US west and east coasts, meaning marketing to increase consumer awareness of Australian lamb could yield dividends inland. "As a high-value market, it is important to Australia’s industry to improve demand for lamb in the US," McRae added.
