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Beef Exports Lackluster, Australian Beef Imports Decline Year Over Year

A strong U.S. dollar, soft global demand for U.S. beef, and lower year-over-year beef production have resulted in a very uninspiring year for U.S. beef exports. In October, beef exports to top U.S. markets were well below year-prior levels, with the exception of Mexico (up by 13 percent). Japan, the top U.S. export destination for fed beef, continues to import more beef from Australia than from the United States, and this adversely affected total exports. Australian cattle slaughter has slowed and is expected to fall dramatically in 2016, subsequently constraining beef exports. This should help boost demand for U.S. beef exports to Japan next year. Overall, the United States is expected to produce more beef in 2016 at lower prices, increasing beef available for export, and lower beef prices should partially offset the net impact of a strong dollar and prompt renewed interest in U.S. beef on a global level.

U.S. beef imports were reported lower year over year in October for the first time since February 2014. USDA reported total beef imports at 237 million pounds, down about 13 percent relative to a year earlier. The volume of beef from Australia declined dramatically (-33 percent, year over year) for the month of October, but year-to-date totals are about 34 percent higher than a year earlier. Beef imports from other major suppliers, namely, New Zealand, Canada, Mexico, Uruguay, and Brazil, were all reported higher for the year in October and the January through October period. According to U.S. Customs data, Australia has already filled 100 percent of its World Trade Organization tariff-rate quota of 378,214 tons. However, it is significant that Australia has filled its WTO quota for the first time in over 10 years and thus is accessing the FTA quota for the first time. It is expected that the flow of processing beef from Australia will be significantly lower through the remainder of the year. The Australian cattle industry is at a pivotal point. Cattle inventories are low, producers have begun to reduce slaughter rates, and herd rebuilding is expected to begin next year, assuming favorable weather. These factors will limit the volume of Australian processing beef available for export in 2016. In addition, reduced demand for processing beef from the U.S. will also adversely affect Australian exports next year.

Source: USDA


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