Australia-Beef exports for 2009.

Australia’s beef exports are forecast to rise 3.4 percent in 2009 to a new record, boosted by a sharply depreciated Australian dollar and persistent robust demand in some markets, Meat & Livestock Australia’s chief analyst Peter Weeks said on Monday.

"Exports have got off to a pretty good start for the year, helped by the fall in the Australian dollar," Weeks said in an interview in Sydney as part of the Reuters Food and Agriculture Summit.

"It’s basically the low (Australian) dollar that’s making our exports so affordable -- in Japan our prices in yen terms are about 40 percent lower than what they were a year ago."

Weeks said Australia, which is the world’s No. 2 beef exporter after Brazil, also benefited from a track record of producing disease products whose origins could be easily traced.

"We’ve been in a good position to capitalize on the integrity of Australian beef as we’ve had traceability systems in place that really do put us a step ahead," he said.

February beef exports set a record, with a rise of 20 percent on the year to 79,781 tonnes, Weeks said, strengthening prospects for annual exports to exceed last year’s record 957,479 tonnes.

MLA is tipping Australia’s beef exports to reach 990,000 tonnes this year as sales to Japan, the country’s No.1 export beef market, are maintained and sales to the United States, the No.2 market, grow despite the worst economic crisis since the Great Depression.

"The United States is proving to be a good market as the Australian dollar has made Australian exports more affordable," Weeks said.

He said U.S. consumers were switching to cheaper meal alternatives such as hamburgers, fuelling demand for the manufacturing beef Australia exports to the United States.

Besides exporters benefiting from the Australian dollar’s depreciation of more than 20 percent against the U.S. currency over the past six months, subdued demand in Australia had made more product available for export, Weeks said.

"In part the rise in exports will be due to a 2 percent fall in local consumption as Australians cut expenditure," he said.

Weeks sees export sales increasing in volume as cheaper cuts replace more expensive products while Australia’s competitiveness will allow it to increase market share despite global demand weakening in the face of the economic crisis.

"Buyers are still having trouble getting credit and they’re still trying to run down stock in a climate where they’re worrying about demand so it is a bit of a surprise that Australia’s exports are so strong."

Weeks said Australia’s disease free status and full traceability of meat products gave it an edge that had been boosted by the Australian dollar’s depreciation.

That is helping Australia maintain its beef exports in Japan where curbs on U.S. beef imports over disease concerns have eased, although, in South Korea, last year’s lifting of bans on U.S. beef exports have put Australian exports under pressure.

Australia displaced the United States as the biggest supplier of beef to the South Korean market after a ban was placed on U.S. imports in 2003 because of a mad cow disease scare.

"If anything U.S. competition in Japan will ease simply because of the currency change but in Korea, they (U.S.) are a competitive force now --- last month it was 50/50 (market share) between us and the U.S, which isn’t too bad as before 2003 our share was only 20 percent," said Weeks.

"We’re forecasting a 17 percent fall in what we send to Korea this year as U.S. beef returns. Demand may be down as the Korean economy isn’t looking too well."

Weeks said MLA was launching new marketing campaigns in Japan and South Korea to build up consumer recognition of Australian beef.