Australia's beef farmers need to shake-up their act to prevent US rivals regaining dominance in the US$1bn South Korean import market, an official report has warned.

Consumer fears will protect Australian farmers for now from competition from US beef exports, which were allowed back into South Korea last year after a five-year ban prompted by the discovery of BSE in American herds.

"Negative consumer sentiment could mean that any increase in sales of US beef is insignificant in the short-term," Abare, the Australian research bureau, said.

The Korean government's initial efforts to reopen US beef exports last year had met with "strong nationwide public resistance".

Steak versus burgers

However, the US, which historically provided about two-thirds of South Korea's beef imports, will fight back over longer-term, helped by a free trade agreement and competitive prices, the report said.

The price of Australian beef soared 70% to US$5.17 a kilogramme on the Korean import market between 2003, when the ban on US beef exports was imported, and 2007.

Korean supermarkets expect to price US beef cheaper than Australian beef despite it meeting better consumers' preference for marbled steaks.

"In Korea, high quality US beef is consumed mainly in hotels and Western-style specialised restaurants, whereas Australian beef is usually consumed by households and fast food restaurants such as McDonald's," Abare said.

Marbling factor

Australian farmers, while exploiting the country's "clean and safe" image while they can, should consider producing more marbled beef to protect exports longer term.

Marbling of beef can be increased by feeding cattle on grain rather than grass.

Shipping beef in separate cuts, rather than whole carcasses, would also improve export prospects.

"Korean consumers prefer a limited range of beef cuts," Abare said.

South Korea, once America's third biggest beef export market, is set to grow beef imports by 36% to 435,000 tonnes over the next decade, the US Department of Agriculture estimates.