The report by Agribusiness Bank Rabobank reveals the impact has been most visible in Australia, after China’s “safeguard quota” for Australian beef imports was reached in mid-June.
This saw Australian beef exports to China fall 71 per cent month-over-month from May to June, with July volumes remaining similarly low.
Much of this Australian product has been redirected to alternative destinations, such as Japan, South Korea and the United States.
Report lead author, Rabobank senior animal protein analyst Angus Gidley-Baird, said as Australian beef shipments to China declined following the triggering of the quota, Chinese buyers had turned to other suppliers.
Despite this, Australian beef production volumes remain high, the report says.
“Australia’s national weekly slaughter volumes continue to track around 150,000 to 160,000 head per week, which is in line with the first half of this year,” Mr Gidley-Baird said.
“And year-to-date total weekly slaughter volumes are up six per cent on the same time last year.
Cattle saleyard numbers are also at some of the highest levels in the past 10 years.
For Australia, cattle prices remain strong, but eased in late July.
“Although El Niño has been declared, many cattle-producing areas received favourable rainfall through May and June with further falls in August,” he said.
“This saw cattle prices rise in June and July to the highest point for the year as producers took advantage of the better prospects for feed production.
“Towards the end of July, though, prices started declining as the combination of the China quota and ongoing caution around seasonal conditions took the heat out of the market.”
RaboResearch believes prices may ease further in coming months as some grain-fed cattle and beef volumes build in the system given reduced export numbers.
“But late in Q3 and into Q4, pending seasonal conditions, the annual January 1 resetting of the China quota is expected to see some support return to the market,” Mr Gidley-Baird said.
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