Strong demand pushes beef export values toward records

Strong demand pushes beef export values toward records


Beef
A combination of high export volumes and high prices has the year to May beef export value sitting at $3.82 billion.

A combination of high export volumes and high prices has the year to May beef export value sitting at $3.82 billion.

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The Stock Take: Mecardo's Angus Brown writes about Australia's beef export market.

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July was another big month for beef exports, especially to China.

Increased demand saw total beef exports at their highest level since the heady days of the 2011-12 herd liquidation.

But it's export values that we are interested in today.

The data is lagged by a couple of months, but we are getting a picture of the biggest year for export values on record.

A combination of high export volumes and high prices has the year to May export value sitting at $3.82 billion.

In the first five months of 2019, the amount of money coming in from beef exports was 22 per cent higher than last year, and 4pc higher than the previous record year in 2015.

The peak was hit in March when $919 million worth of beef was exported (Figure 3).

FIGURE 3: Australian beef export values. Export value is a combination of volume and price, and while volumes aren't at a record, prices certainly are. Export values have taken a clear leap higher in 2019.

FIGURE 3: Australian beef export values. Export value is a combination of volume and price, and while volumes aren't at a record, prices certainly are. Export values have taken a clear leap higher in 2019.

After finding solid resistance to export values above $8 a kilogram for four years, four of the past six months have been above $8/kg.

December last year and March this year were above, or very close to $9/kg.

Strong export volumes and strong export prices suggest strong demand.

This is good news for cattle markets, and is a good part of the reason cattle markets have held at historically strong levels during the latest liquidation.

What does this mean?

Record export values also give an indicator of the upside which might be expected when cattle supply does tighten.

There is room for prices to gain plenty of ground with export prices moving higher.

Add to that the spectre of higher export values with tighter supply, and we are likely heading for new record cattle prices.

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The story Strong demand pushes beef export values toward records first appeared on Farm Online.

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