The Australian beef trade is looking to take a fall in the next few years with recent statistical evidence that South American is moving into our previous territory.
While the beef trade has grown 4% in the last financial year, the current rate of South American expansion, as well as increased production from the USA and our decreased rate of production has lead market analysts to believe that the next financial year will result in considerably lower rates of export.
Australia in the last few years decreased their share of the Chinese market 12% to 33% of the total market share, compared to the 47% occupied by South America. Currently the largest market share in South America is Brazil, which single-handedly is the largest supplier of beef to China.
Between January to May of this year, Brazil exported 70,000 tonnes of Beef to China, a number which is only expected to strengthen in the next few years. Similarly Uruguay and Argentina are growing considerably in this area. The region is known for their low-cost and low-quality frozen products - serving the needs of the lower income earners in China.
In the month of May, 2016, some quite interesting statistics emerged, when despite meat exports falling, the chilled meat market had an 11% rise. This news clearly has given Australia a chance to brand it's name in this high quality market, to reaffirm value to trading partner China.
What direction should Australia take to regain market share?
Source: ILCS Consulting