An increase in beef production in Australia and growing demand in the U.S. and emerging markets should lift Australia's beef exports to a record volume in 2012, with the outlook buoying cattle producers.

In its annual outlook issued Monday, marketing concern Meat & Livestock Australia Ltd. forecast a 2.7% increase in Australian beef exports in 2012 from the previous calendar year, to a record 975,000 boneless metric tons.

This would follow an increase of 2.8% in 2011.

Australia, the world's largest beef exporter, shipped around A$4.5 billion ($4.7 billion) of beef in the last fiscal year, ended June 30.

Australia's fastest-growing beef export markets in 2012 are expected to be the U.S., Russia and a range of markets in Asia, including China and Hong Kong, which will offset expected declines in shipments to Japan and South Korea, two of the country's three biggest markets, MLA said.

The forecast increase is predicated on growing demand in developing markets and a shortage of beef in key exporting nations, which will push global beef prices higher, the MLA said.

"In previous years, the thought of the Australian dollar not only surpassing parity [with the U.S. unit] but averaging 3 cents above it for 2011 would have bought huge concerns for the beef industry and export volumes," it said. "However, the global shortage of beef, along with burgeoning demand in non-traditional markets, helped to offset much of its impact, especially for cheaper frozen manufacturing meat."

Separately, David Inall, the executive director of the Cattle Council of Australia, a producer lobby, said a number of export markets were emitting strong demand signals.

Australia exports two-thirds of its beef to more than 100 countries and such diversification helps offset any declines in individual markets, he told Dow Jones Newswires in a statement.

"These fundamentals should assist in underpinning a healthy cattle market in 2012," he said.

Of particular note is an MLA forecast that exports to Russia will rise 25% in 2012 from the previous year to 70,000 tons, soaring from 5,000 tons in 2007.

Inall said the Russian economy is on an upward trend, and as a consequence the nation's appetite for beef has grown in recent years.

"Australian exporters have forged strong relationships with the meat-import trade in Russia and this helps to better understand the business dynamics. And while we are confident that the Russian market will continue to grow, it is too early to predict where the upward point is," he said.

-By Ray Brindal, Dow Jones Newswires; 612 62080902; ray.brindal@dowjones.com

(END) Dow Jones Newswires

January 23, 2012 03:06 ET (08:06 GMT)