Australian red meat exports down 29% in March

Flooding in the southeast in February and March and supply disruptions affected Australian red meat exports.

Exports of red meat from Australia decreased by 29% compared to the same month last year. Several factors weighed on the sector's performance last month, Meat and Livestock Australia (MLA) said in a press release.

Following an unprecedented 393% rise in the Shanghai Container Shipping Index (SCFI) between 2020 and 2021, container shipping spot rates stabilized in December and January. Unfortunately, new unforeseen events have further disrupted supply chains both in Australia and around the world, keeping prices high and exacerbating the hardships exporters face.

The most important devastating factor this year was flooding in the southeast in February and March. This affected the entire supply chain: flooded roads prevented producers from transporting livestock, and processors were unable to maintain consistent capacity due to flooding disruptions. The flooding had a particularly strong impact on red meat exports as the port of Brisbane was flooded, closing the main beef export port for several days and limiting capacity for several weeks thereafter.

“This significantly affected exports in March: according to preliminary data, red meat exports in March 2022 will be 29% lower than in March 2021. Fortunately, the Port of Brisbane has reopened relatively quickly and this is unlikely to affect exports in the long term.

“Global events have also affected the outlook for cargo transportation. The Ukrainian crisis has disrupted supply chains across Eurasia and driven up oil prices , driving up costs and exacerbating instability throughout the system,” MLA analysts commented.

Since Russia is the main land transit route between Europe and Asia, the conflict has in some cases made it difficult or impossible to ship goods overland. In addition, Russia's decision to close its airspace to most airlines has increased the cost and travel time of air travel. This, along with rising oil prices, increased uncertainty about the ability to ship goods and kept prices at record highs.

“Despite this, the outlook for exporters remains strong. Limited red meat supplies around the world are keeping prices high, dampening the impact of higher freight rates,” the report says.