Queensland—beef exports moderate but remain key to the outlook

Meat remains Queensland’s largest agricultural export, worth A$4.7b in 2016 (8% of total exports). While beef accounts for the majority of this, beef receipts have been on a downward trend over the last 18 months, as increasing global supply—particularly from US, Brazil and Argentina—outstrips demand. But tempering the negative 2017 outlook has been the recent Brazilian beef scandal. Brazil’s largest meat producers were accused of bribing health inspectors to ignore repackaging beef past its sell-by date and other questionable practices. In response, China, Korea, Japan, the US and several other of Australia’s major export markets temporarily banned Brazilian beef imports.

The medium term outlook is sanguine. China’s growing preference for beef should partly offset softer demand conditions associated with ageing populations in Japan and Korea. OECD estimates suggest China’s per capita beef consumption will rise to 4.6kg by 2025, up from 3.8kg currently (Chart 3). Assuming Queensland maintains its market share in China—roughly 1.2% of Chinese consumption—this would be consistent with 5% p.a. growth in export volumes to China between 2016 and 2025.