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Task 2 Project Report

Australias Food Export Outlook

Prepared and submitted by:

Oktay Duran

July 2017
Table of Contents
Table of Contents .................................................................................................................................. 2
Summary ....................................................................................................................................................... 3
5 Years Export Data of Beef to USA, Japan, Korea, and China. ..................................................................... 4
Table 1. Beef Export to USA - Values ........................................................................................................ 4
Table 2. Beef Export to Japan, Korean, and China - Values ...................................................................... 4
Data Analysis Using Central Tendency .......................................................................................................... 4
Graph 1. Export to USA ............................................................................................................................. 5
Table 3. Data Analysis USA Export ......................................................................................................... 5
Graph 2. Export to Japan .......................................................................................................................... 6
Table 4. Data Analysis Japan Export....................................................................................................... 6
Graph 3. Export to Korea .......................................................................................................................... 7
Table 5. Data Analysis Korea Export ...................................................................................................... 7
Graph 4. Export to China........................................................................................................................... 8
Table 6. Data Analysis China Export ....................................................................................................... 8
Findings ......................................................................................................................................................... 9
What happened to the amount of exports of that product? ................................................................... 9
Graph 5. Export Distribution by Country .................................................................................................. 9
Why do some countries want more or less of this product?.................................................................. 10
References .................................................................................................................................................. 11

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Summary

Australian farmers and agribusinesses are highly reliant on export markets to sell their produce.
58 per cent of Australias total food production is sold to overseas consumers. Agricultural exports
generate 70 per cent of the value for the sector. This reliance on exports requires continual production
and value increases. Australias modest population and gradual consumption growth leads many
Australian farmers to depend on new international markets to expand and maintain profitability.

Australias reputation as a producer of clean, green and safe food has created high global
demand for Australian food products particularly beef, wheat, canola, barley, sugar and dairy.
Upholding and building this reputation is particularly relevant in breaching broader markets, where local
food safety and quality concerns dominate consumer attitudes.

The government has a significant role to play in facilitating market access for Australian farmers
overseas. Australian trade representatives are integral in reducing barriers and developing free trade
policies with agricultural trading partners, to assist farmers in breaching developing markets.

Rapid productivity advancements to feed large markets are highly unlikely in the short to
medium term due to water and input scarcity, climate variability and high rural debt. More than ever,
funding in agricultural research and development is required to address productivity growth and
support export targets.

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5 Years Export Data of Beef to USA, Japan, Korea, and China.

Table 1. Beef Export to USA - Values

Table 2. Beef Export to Japan, Korean, and China - Values

Data Analysis Using Central Tendency

The possible export trend of beef products from Australia to USA, Japan, Korea, and China in the
next few years are reflected in the graphs below. Forecasting by using linear trend is incorporated in the
graph represented by the black thin line.

To better understand the data, the central tendency measures were computed and reflected in
the table that follows for each graph. The percentage of increase of export for each year is also included
in the table.

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Exported Beef to USA
500,000.00
400,000.00
Axis Title

300,000.00
200,000.00 y = 15725x + 250695
100,000.00 R = 0.2171

- 2012 2013 2014 2015 2016 2017 2018 2019


Exported Beef 224,111.00 212,703.00 397,889.00 415,951.00 242,013.00 370,249.00 375,525.80 333,197.04

Graph 1. Export to USA

Table 3. Data Analysis USA Export

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Exported Beef to Japan
400,000.00

300,000.00
Axis Title

200,000.00 y = -9353.7x + 316244


R = 0.9517
100,000.00

- 2012 2013 2014 2015 2016 2017 2018 2019


Exported Beef 308,540 288,796 293,780 285,224 264,325 260,532 252,736 239,286

Graph 2. Export to Japan

Table 4. Data Analysis Japan Export

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Exported Beef to Korea
250,000.00
200,000.00
Axis Title

150,000.00
y = 12955x + 114633
100,000.00 R = 0.9964
50,000.00
- 2012 2013 2014 2015 2016 2017 2018 2019
Exported Beef 125,957 144,365 150,918 166,588 179,854 192,541 204,440 218,767

Graph 3. Export to Korea

Table 5. Data Analysis Korea Export

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Exported Beef to China
200,000.00 y = 5381x + 93402
R = 0.1115
150,000.00
Axis Title

100,000.00

50,000.00

- 2012 2013 2014 2015 2016 2017 2018 2019


Exported Beef 32,906. 154,833 124,586 148,222 94,040. 145,614 118,764 121,970

Graph 4. Export to China

Table 6. Data Analysis China Export

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Findings
What happened to the amount of exports of that product?
The USA is Australias largest market of exported beef. 28.6% of Australias total beef is
exported to the USA based on 2015-2016 Australian beef export report. This was followed by Japan,
Korea, and China with 23.0%, 14.8%, and 10.9% export respectively.

Distribution of Australia's Beef Export

USA (28.6%)
Japan (23%)
Korea (14.8%)
China (10.9%)
Others (22.7%)

Graph 5. Export Distribution by Country

Based on forecasts, the demand for Australias beef to USA, Korea, and China will only continue
to grow in the next few years, but this demand is highly unlikely to be supplied in the short to medium
term due to water and input scarcity, climate variability and high rural debt. For this hindrance to
overcome, the Australian government needs to give more development and financial assistance to this
agricultural sector.

One opportunity for Australia to increase its exporting power is when the Trans-Pacific
Partnership Agreement (TPPA) materializes. The TPPA is an agreement between several countries
including the USA, Japan and Australia which aimed to "promote economic growth; support the creation
and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards;
reduce poverty in the signatories' countries; and promote transparency, good governance, and
enhanced labor and environmental protections by lowering the tariff rates between the signatories
countries. The TPPA was first drafted in 2005 and a final draft was agreed on Oct. 05, 2015 and signed
on Feb. 04, 2016. But due to the political changes in the USA, President-elect Donald Trump has

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withdrawn the US from the TPPA. The other 11 TPP countries agreed in May 2017 to revive the deal
without US participation.

Why do some countries want more or less of this product?

The USA is the worlds largest importer of beef. This leaves the question why does the US export
beef if they have bountiful supply of this product? The answer to this is due to cultural differences and
preferences. U.S. beef demand largely consists of demand for ground beef and steaks. Ground beef can
be made from a wide variety of qualities of lean but steak demand is mostly oriented towards high-
quality middle meat cuts. This results to the US importing the meat cuts/products that they prefer less.

The demand of beef to Japan is constantly declining since 2014 and is likely to continue till the next
few years. This decline may be attributed to the increase of Japans importing of beef from the USA.

For China, due to the land-intensiveness of agriculture and their lack of arable land resources, they
have high demand for beef. Also, another reason for them is the safety for food. In a recent survey, 80%
of respondents stated that they were unhappy with food safety in China. This is because of the rampant
cloning or counterfeiting of food products which results to health issues among the consumers.

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References:
https://www.mla.com.au/prices-markets/overseas-markets/

http://www.globalmeatnews.com/Livestock/US-beef-growing-in-

https://www.mla.com.au/globalassets/mla-corporate/prices--markets/documents/trends--
analysis/fast-facts--maps/mla_beef-fast-facts-2016.pdf

http://www.beefmagazine.com/cowcalfweekly/0611-why-does-us-import-export-beef

https://en.wikipedia.org/wiki/Trans-Pacific_Partnership

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