WITH only one week in June when national slaughter numbers were not above 120,000 head, it came as no surprise to see a step up in beef export tonnage for the month.
The Department of Agriculture recorded 94,009 tonnes (shipped weight) to all destinations, up slightly on May's 91,500t but up substantially on the 79,500t result in June last year.
For the first half of this year the cumulative total is now 478,379t, up by almost 80,000t on the same period last year.
Enough of the year has now elapsed to set the trend for what to expect in the remaining half.
In that regard slaughter capacity, constrained as it is by labour issues, seems unlikely to stretch beyond 125,000 head per week.
Composition of the kill is the other major factor which determines production and export levels and in the simplest of measurable terms this comes down to the proportion of males and females in the mix.
In the early months of this year the proportion of females in the kill was below 40 per cent but by the second quarter that had stabilised to around 45-46pc.
Anticipating that the third and final quarters this year will be much the same as the second quarter in capacity and composition, overall production for the year should lift appreciably on last year's result allowing exports to push out beyond the 1 million tonnes mark.
Last year saw 854,000t across all destinations and MLA's current forecast for calendar 2023 sits comfortably in this scenario at 1.06mt.
To illustrate the significance of the relationship between capacity, composition and export meat tonnage, it is useful to look at other periods in recent years when export tonnage was much the same as it is at present.
In February 2019 exports were 94,900t. But instead of 120,000 head, weekly slaughter at that time was running at around 147,000 head.
Intuitively that level of kill would have suggested monthly exports in excess of 100,000t but the difference was in the proportion of females, which at that time was as high as 53pc.
This had the effect of dramatically reducing average carcase weight which ABS recorded as low as 280kg in first quarter 2019. As well, boning room yields would have been negatively affected.
It was not until the next month that exports crept above 100,000t but it took an escalation in weekly kill to well over 150,000 to get there.
Looking at the June export results, the United States, with its 20,585t volume, has returned as Australia's largest export market on a single month basis.
However, on a cumulative basis for the first half, the US still trails Japan and China and just overshadows Korea to slot into third place.
The US June tonnage represents a solid 2600t gain on May, a massive 9700t gain on June 2022 and brings the cumulative first half to 89,000t, 51.5pc up on the same period last year.
It is significant also because it is the first time since July 2020 that monthly volume has exceeded 20,000t.
Interestingly the biggest part of the lift in volume to the US was in frozen product to the west coast.
Usually, the east coast is by far the major destination for both frozen and chilled Australian product and while there was little change there in frozen volume there was a significant 18pc rise in chilled volume albeit off a relatively small base.
China meanwhile has followed on its strong May result with a similar 19,583t in June.
Already 35pc up on cumulative half-year basis compared to last year, China will easily surpass 200,000t for the full year if it does no more than maintain present import tonnage.
China has only exceeded 200,000t once since its beef trade with Australia effectively began in 2012.
In contrast to the US and China, Australian beef exports to Japan have dropped off in the past two months compared to previous year.
For the first four months this year Japan maintained a modest increase over 2022 levels but that changed in May with a year-on-year drop in volume of 6200t.
This was not so much due to an outright fall in 2023 volume but rather to a combination of an easing trend in 2023 against a sharp rising trend in 2022.
This repeated in June where the 18,831t volume was only marginally down on May but because of the mid-year spike in 2022 the year-to-year comparison resulted in a deficit of 3700t.
Latest DAFF figures predict a similarly unfavourable comparison in July but the cumulative half-year result provides some comfort that the easing tendency in this market is so far contained at 5.5pc.
Rising beef inventories in Japan as a consequence of recessionary trends in consumer behaviour are implicated in this softer market tone.
Korea meanwhile appears to have settled back into a more familiar monthly pattern after its uncharacteristic surge to 20,000t in March. June volume of 14,486t is little different to the previous year.
While not up there with the market leaders in absolute terms, Indonesia is the standout performer with current half-year result of 31,000t, up 75pc on last year.
Grid rates ease
AFTER the surge of cattle in June which caused processors to temporarily withdraw price grids late in the month only then to have to shuffle cattle because of widespread rain a week later, things have settled to a more orderly pattern.
However, there is little joy on the trading side with one major operator describing the beef market at present as very weak. "Lot of meat in domestic and not much happening in export," he said.
His reinstated grid was quoted this week at 520c/kg for YP ox and 430c for heavy cow.
On the supply side there is now an expectation of some tightening by late August before an improved run home in the final quarter with contribution from the Channel Country and start of seasonal turnoff in the south.
In the meantime, several southern operators are currently active in Queensland as far up as Blackall in the central west.
