Brazil exported 196,000 tonnes of beef in August, down 27% year-on-year, and Australia 128,000 tonnes, down 5%, as their quotas for China ran out. Uruguay and the United States also recorded volume declines.
Beef exports from the main players in the international market showed mixed performances in August. Brazil and Australia both posted fresh declines, conditioned by the exhaustion of their quotas for China.
In August, the global leader exported 196,000 tonnes of beef, down 27% year-on-year. It is the second consecutive double-digit fall, after more than three years in which it posted almost exclusively increases.
The cause is the exhaustion of the quota in China which, however foreseeable, continues to shake up that country's operations. Brazil had a very active first half in that market: it reached a peak of 158,000 tonnes in June, then went to 83,000 in July and August marked only 16,000, with which it lost the lead among destinations that it had held for years and slipped to fifth place.
Despite this slowdown, it is estimated that it exceeded its quota by between 150,000 and 200,000 tonnes, which will generate serious problems when it all arrives at destination. The average price of the beef shipped to China was USD5,700 per tonne, considerably lower than in June and July (6,800 and 6,400, respectively), but not enough to cope with the 67% tariff that surplus will face.
Thus, the United States, which had been the second most important destination, moved into first place, although the volumes shipped were far from offsetting the loss in China: they went from 22,000 and 26,000 tonnes in June and July to 31,000 in August. A more significant increase went to Russia, which moved from 6,000 and 11,000 tonnes in June and July to 21,000 now. Another notable rise was to the European Union, which had booked 7,000 and 10,000 tonnes in the previous two months and now reached 20,000; this surge was surely in anticipation of the suspension of Brazilian beef in the European Union and Norway in force since last week, which left that huge market in third place.
Brazil's export position over the next couple of months, with almost no China and no European Union — important not so much for volume as for value — will be compromised. The very timely opening of the US market, with the new quota of 300,000 tonnes of lean trimmings to be filled at a rate of no more than 100,000 tonnes per month between September and November, may not bring all the theoretical benefits: it remains to be seen whether it can meet such a high production of cuts, especially when the fabrication of the beef that used to go to China and the European Union is missing, which is the activity that generates them. From late October-November it will be able to resume operations with China to start using the 2027 quota.
In the first eight months it totaled 1.9 million tonnes, up 5% year-on-year, and in the last twelve months it was 3.1 million, with a 14% year-on-year increase. In August it achieved an average price of USD6,200 per tonne, having fallen USD200 in July and August from the recent peak of 6,600 in June.
In August, Australia shipped 128,000 tonnes of beef abroad, five points down year-on-year. It is also the second month with this characteristic for Australia, although it had not accumulated as many months of growth as Brazil.
The cause also lies in the sharp decline in China. In the first five months it was averaging 27,000 tonnes per month to that destination and, having used up its quota, it made a sharp turn and fell to 8,000 in July and 6,000 in August. Analysts believe that certain products, such as cuts from wagyu animals or premium Angus cuts, can absorb the tariff on the quota surplus.
Another market that is becoming difficult for Australia is South Korea, third until May but which moved into second place after the slowdown in China. In this case, it lost the favorable tariff within the quota agreed in its free trade agreement, of 5%, and began paying 25% when the quota ran out at the end of August, the earliest in the year this problem has ever occurred.
In eight months it totals 1.08 million tonnes, up 9% year-on-year, and in twelve months, 1.6 million, with 8% growth.
Last month's shipments totaled 42,000 tonnes carcass weight equivalent (tce), down 17% year-on-year. While shipments to the United States and Israel remained similar to those of the previous August, there were lower exports to China (6,000 tce) and to the European Union (3,000 tce), which explains the decline in the total; the other destinations had minor changes.
In the eight-month cumulative, shipments were 318,000 tce, down 13% year-on-year. The 45,000 fewer tonnes sold are made up of 17,000 fewer to the European Union, 14,000 fewer to China, 8,000 fewer to the United States and 5,000 fewer to the United Kingdom. Other minor changes were 1,000 tce more to Israel, 2,000 more to Mexico and 3,000 fewer to Canada.
In July, with data published with a longer lag, the United States exported 65,000 tonnes, equal to the monthly average of the first half and 7% less year-on-year. It posted declines in its main markets: South Korea with 4,000 tonnes less (-22%), Japan with 2,000 (-10%) and Canada with 1,000 (-16%); it only managed to hold its level with Mexico, with almost 8,000 tonnes.
There was a surprising rebound in China, where it sent 2,000 tonnes, double the year-on-year figure, after many months in which it was placing only a few hundred tonnes; the exhaustion of Brazil's and Australia's quotas must have helped, although it has so far filled only 5% of its enabled quota.
In seven months it totals 454,000 tonnes, 16% less year-on-year. The average price in July was USD10,600 per tonne, with 11% growth on the previous July, similar to the improvement over the seven months.
