Australian Beef could become a rare sight overseas this year according to a warning from research firm IbisWorld, due to drought conditions pushing the national herd to its lowest level in 22 years.
With the Australian dollar performing well internationally (hitting 80 US cents this week), combined with a reduced supply, what beef is available to sell overseas is very likely to be priced out of major export markets.
And, with international demand for meat products expected to surge amid a global rebound following Covid-19, there is a chance Australian beef could be left behind.
“With the national herd at its lowest point in over two decades, and global demand for meat products expected to surge amid a rebound from COVID-19, there is a real chance that Australia may fall to third or fourth place in the global beef export market,” said IBISWorld senior industry analyst, Liam Harrison.
This could also lead to an increased price locally.
“Domestic meat prices are projected to remain high at the retail level [and] an anticipated shift in consumer preferences towards organic beef, which carries a price premium, will likely support a slight rise in domestic retail beef prices,’ said Harrison.
Australia’s largest three export markets remain Indonesia, Vietnam, and China, which account for 34.7 per cent, 31.2 per cent and 18.8 per cent of Australian beef exports respectively.
However, low supply and rising prices have prompted market strikes in Indonesia, and a warning from the country’s trade ministry that it may need to source beef elsewhere.
Exports to China are also under stress, due to the country’s instigation of a trade war with Australia in recent months – blocking trade in many of Australia’s major export markets.