Australia benefiting from Asian ban on US beef
Australian beef sector is riding a short-term boom following a
series of bans on US beef exports to major Asian markets.
According to Peter Kenny, president of AgForce, an organization representing cattle farmers in Queensland, northwest Australia, increased demand from Japan and South Korea have been the main driving force behind the strong growth in demand experienced by beef exporters.
"There's no doubt that the continued absence of the USA from our major Asian markets is having a positive short-term impact on our market, along with the Australian dollar's recent correction," he said.
He also explained that the rising demand is having a positive effect on the price of Australian beef. "Recently, the price received by processors for our product has risen significantly," he said.
Kenny did add that several factors could curtail the short-term increase, mentioning that the supply of cattle might be jeopardised due to continuing dry conditions in Southern Australia and some parts of Queensland.
"A recent upward surge in grain fed prices, however, tends to point towards an increase shortly to correct the current disparity between processor and producer returns," he said.
Kenny added that in the longer term the inevitable return of US beef to the Japanese and South Korean market would be likely to put an end to some of the short term export increases recently experienced by the industry. "Cynics suggest it will be after the Japanese elections mid-year, but before the US elections at the end of the year, to ensure the best political result for the incumbent leaders of both countries," he said.
"However, as the USA continues to struggle to implement improved testing and traceability systems it appears unlikely it will re-enter the market in the short-term. This gives Australia 'a window of opportunity' that we must capitalise on by seeking to trade on our excellent food safety reputation."
Exports of US beef to Asia have been seriously impacted over the past four month over international concerns raised over standards of testing for mad cow disease. Japan in particular said it wanted all US beef imports to be tested before reaching the country. Since then the US Department of Agriculture says that it is about to embark upon a programme to increase testing for the disease ten-fold.
