South America: an emerging competitor for Australia's beef industry

Overview

The beef sectors of Brazil, Argentina, Uruguay and Paraguay have grown significantly over the past two decades. This report profiles the beef industries of these four beef exporting South American nations, as well as Australia, and evaluates the trends and key factors behind the growth in real export values since 2000. Forward looking scenario analysis based on actual and hypothetical changes to policies and operating environments is undertaken to assess the potential impacts on Australia's future beef exports.

Key issues

Global demand for beef is expected to expand significantly over the next several decades, especially in Asia, which will present opportunities for exporters.

Australia and South America, together, account for almost half of world trade in beef.

South America is emerging as a significant competitor for the Australian beef industry, as market access to Australia's traditional markets is improving.

For the five beef exporting countries profiled in this report, improved market access was the main driver of real export revenue growth (in 2000 US dollar terms) between 2000 and 2014. Other contributing drivers include changes in export supply costs, exchange rate movements and growth in demand for beef.

Three forward-looking scenarios assess the potential change to export growth from 2014 to 2030 from changes in domestic and international operating environments. These include: the removal of Argentine agricultural export requirements; improved market access for South American beef; and improvements in transport infrastructure for Brazil and Australia.

To maintain its export competitiveness, Australia will need to: 1. improve productivity growth both on and off the farm 2. continue to target premium markets and improve market access in order to be responsive to changes in the market 3. maintain a production system that ensures its status as a clean and green beef producer so that it will be able to distinguish itself on quality when it cannot compete on price with lower-cost exporters.