![Late surge for exports Late surge for exports](/images/transform/v1/crop/frm/Fjc97JFBmLYW9DSUSgjdD/d9437251-7056-4c00-8952-7ac536a17cfa.jpg/r0_0_1024_683_w1200_h678_fmax.jpg)
Figures released by the Department of Agriculture and Water Resources (DAWR) last week showed total shipped weight of beef for December was 89,350 tonnes, the highest figure since June and 3000t more than for November.
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While it looks a little odd that December with its plant closures could export more than the full month of November, it can probably be explained by the time lag between production and actual export plus the fact that there is usually a certain amount of cleaning out the cold storage rooms ahead of plant shut down.
For the 2016 calendar year, DAWR figures show Australia exported 1,018,000 tonnes.
This is well up on the MLA prediction of 980,000t made in October last year when their expectation was for the reduced slaughter levels of late July, August and September to continue or decline even further in the final quarter.
However within days of the appearance of that revised outlook, national weekly slaughter numbers jumped from a low of 101,000 to 130,000 plus and remained there right up to the week ending December 16.
The reason, of course, was the unusually wet winter. Instead of losing condition on dry, frosted pasture, cattle gained weight.
In particular, cattle in the far south-west of the state were packing it on as a result of the feed brought about by the combination of rain and good runs in the channels.
It was mid October when the country had dried out enough for things to start moving and it is probably fair to say that even those closest to the coal face were surprised at the quality, weight and continuing flow of cattle right up to the Christmas break.
There is the suggestion that there are still more to come but it may be February at least before the heat eases up enough for them to appear.
Then of course it might rain and that could push things back to the more usual start time of after Easter for the stock camps.
The fact that Australia went against the odds in 2016 to make it four years in a row of beef exports exceeding 1million tonnes begs the question of what 2017 might look like. Obviously much will depend on the weather for if a widespread season does eventuate over the coming months every female possible will be retained in the herd.
The number of females available for slaughter is a key factor in the proportion of Australian beef production that is destined for export.
![In 2016 Australia went against the odds to make it four years in a row of beef exports exceeding 1million tonnes, thanks largely to the unusually wet winter. In 2016 Australia went against the odds to make it four years in a row of beef exports exceeding 1million tonnes, thanks largely to the unusually wet winter.](/images/transform/v1/crop/frm/Fjc97JFBmLYW9DSUSgjdD/c5c4dcb1-0ef2-4735-bd7a-cad49c6251ee.JPG/r529_0_2534_1982_w1200_h678_fmax.jpg)
For example in 2012 when the national kill was virtually the same as 2016, only 963,000t were exported compared to the 1,018,000t last year.
The reason being that in 2012 females represented about 37pc of the total kill while in 2016 that figure was around 42pc.
So if a season eventuates in 2017, retention of females will likely pull the total kill below 2016 level as it would be too soon in the recovery phase to see any appreciable increase in male cattle numbers.
That could make it a similar sort of year to 2010 following the breaking of the previous drought.
In that year only 923,000t were exported.
That would likely make it less than a joyous year for processors as the shortage of numbers could be expected to maintain upward pressure on cattle prices as well as compounding the problem of throughput inefficiencies.
Market gains and losses
BY far the greatest turnaround in 2016 has been with the United States.
Taking a massive 415,951 tonnes in 2015, trade to this market fell to 242,012t last year.
That is a drop of 174,000t or 42pc.
The reasons for this diminished interest from the US stem from increased domestic production as a result of herd rebuilding and lacklustre demand for beef in foodservice and retail due to high-price fatigue and intense competition from chicken and pork meat.
Still, it could be worse.
In 2011 when the US was at the height of its drought-induced herd liquidation, Australia’s beef exports amounted to a mere 167,000t.
Going forward, US domestic production is expected to increase further in 2017 and a good indication of the extent of this increase will come at the end of this month when US Department of Agriculture release the January 1 cattle inventory report.
Japan was also something of a nosedive market in 2016 with 264,000t compared to 285,000t in 2015.
But on the bright side, that makes Japan Australia’s largest and most valuable beef market.
Also, there is some cause for optimism that the decline in this market may turn around and head back toward the 300,000t mark.
With the TPP dead in the water Australia looks set to retain its tariff advantage for the time being and with the prospect of a strengthening US dollar, the American processing sector may find it harder to compete in the export environment.
Australia’s surge to 26,651t in November, the highest monthly exports to Japan since March 2015 followed by a strong December result at 23,254t are good signs.
Even more positive is the Korean market.
Since 2012 Australian exports to Korea have increased year on year. Last year’s 179,854t was an 8pc increase on 2015.
The notable thing about this market is that growth so far does not appear to be greatly hampered by the FTA safeguard trigger which invokes a reversion in tariff rate back to 40pc.
In 2016 the trigger was 160,829t and as it increases by only 2pc per year it will again be an issue in 2017.
Indonesia is another good-news story with a 59pc increase to 61,144t in 2016 on the previous year.