Despite a softening in the market, Australian cattle prices are unlikely to drop back to pre-2013 levels.
For the first time in three years, Australian cattle prices are now lower than year-ago levels, and production is higher, resulting in downward pressure on the market that is expected to continue throughout 2017.
This is one of a number of revisions to 2017 projections included in Meat & Livestock Australia’s (MLA) mid-year cattle industry update, made as a result of factors including a poor July-to-September rainfall outlook for southern Australia following the dry autumn, 20-year low female slaughter and volatile global market activity.
MLA’s Manager of Market Information Ben Thomas said the turning point for Australian beef came in June when eastern states’ slaughter consistently tracked higher than year-ago levels for the first time since 2014, while at the same time, cattle prices dropped below year-ago levels, also for the first time in three years.
“These trends are likely to remain in place for the remainder of 2017 and have a significant impact on price and production expectations,” Mr Thomas said.
“It has been a good run for prices – for three years, producers selling at the same time each year have received more for their cattle than the year before. That’s now changed, though we’ll remain well above that five-year average for the foreseeable future.”
Despite a softening in the market, Mr Thomas said Australian cattle prices are unlikely to drop back to pre-2013 levels, given continuing restocker activity as pasture conditions improve, an Australian dollar that is unlikely to strengthen and reducing tariff regimes into Japan, Korea and China.
Mr Thomas said record low female cattle slaughter as a result of the ongoing national herd re-build had impacted many parts of the industry.
https://www.mla.com.au/news-and-events/industry-news/australian-cattle-market-passes-crossroads/
