BIGGEST monthly beef export tonnage so far this year was recorded in May according to figures released on Monday by Department of Agriculture.
At 105,489 tonnes the May figure is not unexpectedly up on April's surprising 98,000t and the solid 102,000t recorded in March.
May is always a strong month, being relatively free of production loss from public holidays as well as benefiting from increased cattle flow as western stock camps ramp up into full stride after Easter.
But for all that, the May result is also notably the first time this year that tonnage has not exceeded same month last year.
The first four months were consistently 11-12 per cent up on last year (9400t on average) but May has now dropped behind by more than 4000t.
Finding a ready reason for this is not so easy.
According to MLA's weekly kill figures, May this year appears to be well ahead of same month last year but confirmation of that will not come until ABS releases its slaughter figures in early July.
The only thing that does stand out is that the female proportion of the kill rocketed to 58.1pc in March this year.
Again we will not have confirmation whether this highly elevated level continued through April/May until ABS data comes in, but the suspicion is that it most likely dropped back to low 50s in April because of the rainfall events at that time and then surged back up again in May because the April optimism was short lived as frosts heralded the onset of winter proper.
If this is the case and the female percentage in April did fall to very low or even sub 50s, it would represent an upward spike in average carcase weights and by association higher than expected export volumes.
That would explain the unusually high export volume in April (that drew attention in this column at the time) and now the low May figure relative to slaughter numbers.
The takeaway message from this is the level of volatility that now appears to have crept into Australia's slaughter pattern and consequently beef production and export volumes.
That in turn would seem to be a consequence of too many years of depressive drought, herd liquidation and unfulfilled hope stemming from weather events that failed to deliver.
China surge continues
MEANWHILE on the receiving end of Australian beef exports there are some noteworthy developments.
China continues its bull run with yet another record monthly intake.
May's figure of 22,968t is 11pc up on April and makes four consecutive record-breaking months.
It also means our beef trade with China is currently running at 60pc ahead of last year which in turn was the biggest year since trade effectively began in 2012.
China's progressive tonnage for the year is now 95,428t, just 7000t behind second biggest market the US.
Whether China goes on to eclipse the US as our second biggest market is another matter.
On that score it needs to be remembered that just four years ago the US took 416,000t of Australian beef.
At present the US herd is nearing the peak of its expansion cycle which means its own production is tempering demand for imported lean.
But inevitably a contraction phase will follow at some time in the future and that can be expected to affect import demand.
In the meantime the US market is bubbling along with modest growth of 12pc on 2018.
Unfortunately on the other side of the ledger, our biggest and highest-value market Japan is in negative trend.
While May volume of 26,841t was up on the previous month, it was down by 15pc on last year.
April was similarly down and March to a lesser extent, which compounds the loss in just three months to 13,000t.
On a year-to-date basis this translates into a drop of 9pc which has to be of concern considering the favoured tariff position Australia holds in the Japanese market.
Other premium market Korea, which had been in positive trend for the first four months of the year, has now also turned south.
May's 13,516t is down 1200t or 8pc on same month 2018.
Indonesia too had been showing positive growth of 17pc through to April but it also nosedived in May to the extent that cumulative year-to-date is now negative 1pc on last year.
More tariff trouble for US meat sector
JUST last week it looked like things were settling down between the United States and its near neighbour Mexico with the lifting of retaliatory tariffs by the latter in consequence of agreement being reached on the make-up of a new US-Mexico-Canada trade agreement.
Once ratified the deal will formally re-establish the zero-tariff trading environment that existed previously under NAFTA but until that happens it seems President Donald Trump is prepared to use the threat of tariff to remedy whatever grievance he sees fit.
Accordingly, Trump announced on Thursday night last week that he would impose a 5pc tariff on all goods imported from Mexico commencing June 10 unless Mexico took effective action to stem the flow of migrants from Central American countries through Mexico to the US.
Lack of action would see the tariffs rise progressively to 25pc by the beginning of October.
On the import side there has always been a significant flow of Mexican feeder cattle into US southern states so the tariff would be a significant cost impost if circumstances caused it to be passed on to the buyers rather than back to the sellers.
But far more concerning for the wider US meat export sector is the certain likelihood of retaliatory tariffs from Mexico on US pork, chicken and beef.
Mexico is the number one export destination for US pork and chicken and number three for beef.
The US Chamber of Commerce is reportedly so concerned at Trump's latest move that it is considering legal action against the White House.
