Japan, South Korea key markets for Aussie beef

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Beef sales to Japan and South Korea are forecast to rise steadily over the next five years, though improving supply chains could help strengthen sales even further, Rabobank says

Steady demand for Australian beef is expected to grow in the key markets of Japan and South Korea, despite neither yielding record growth or market-setting prices this year.

As outlined in a report by agribusiness banking specialist Rabobank, Japan and South Korea represent two pivotal markets for Australian beef with demand anticipated to grow steadily. 

Over the next five years, total import volumes to Japan are expected to increase by just over two per cent per year, while South Korean total beef imports are expected to rise at just under four per cent yearly. 

Rabobank spokesperson Angus Gidley-Baird says the consistent demand for beef in Japan and South Korea will help stabilise the industry in Australia. 

"Given that Australia’s current beef production is down and is many years off recovering and growing beyond its previous volumes, what we need at the moment is strong trade partners who value the Australian product," Gidley-Baird says. 

"Over the past 20 years, the Japanese and South Korean markets have remained true to form, providing major beef-exporting countries, such as Australia, with a stable, reliable market.  At the same time, the strength of demand in these markets also means they hold their own on volumes and prices.

"These countries will continue to form the cornerstone of the Australian beef export market and, as such, help to underwrite the success of the Australian beef industry.

"This makes them critically-important trading partners that require ongoing attention."

Rabobank’s prediction is reflective of both countries’ consistent and stable consumption patterns as well as other factors such as the ease of doing business and the ability to optimise carcase value. 

Beef exports to Japan and South Korea are expected to rise by two per cent and four per cent per annum respectively

Despite not boasting the sheer volume of beef imports of other major trading partners such as the United States or China, the Japanese and South Korean markets together still accounted for $3.7 billion dollars’ worth of beef exports – around 38 per cent of Australia’s total beef export value.

Gidley-Baird also says while the outlook for Australian beef consumption in Japan and South Korea was favourable, an even better outcome could be achieved with the development of a more consistent supply chain – particularly regarding grain-fed beef. 

"We already see a strong preference for grain-fed beef into Japan and South Korea with 51 per cent and 37 per cent of exports respectively made up of grain-fed beef," he says. 

"But there are also ways to improve consistency and quality in a pasture-based system, including managing stocking levels and feed availability with a view to turning off cattle that meet market specifications and reducing the impact of seasonal variation."  

Australia though, is not the only country vying for the market share of Japanese and South Korean beef consumption with the report warning of the threat of complacency for Aussie beef farmers.

The United States are currently the dominant suppliers of beef for the two countries while other beef-producing nations have also began increasing their footprint in the region. 

"There are now other global players with their eyes on these valuable markets," Gidley-Baird says.

"Poland, Ireland, the UK, Mexico and Canada have all increased volumes of beef to Japan recently, though volumes in South Korea are more stable. 

"While these other exporters remain a small proportion of the market, Canada, Mexico, Poland and Ireland all have possibilities of increasing scale. 

"And increasing formalisation of trade alliances and trade relationships will continue to erode Australia’s current trade agreement advantage."

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