Strong global demand good news for Aussie red meat industry

AUSTRALIA - Strong global demand for Australian beef and lamb is the driver behind a positive outlook for the red meat industry, according to Meat & Livestock Australia’s Chief Market Analyst Peter Weeks.
calendar icon 22 November 2006
clock icon 3 minute read
Speaking today at the MLA producer forum in Adelaide Mr Weeks said that despite the severe drought covering most of Australia’s livestock production areas the Australian livestock industry was still managing to produce near-record amounts of beef and lamb.

“Production levels for both beef and lamb are currently near the highest on record and the overall sales value of Australian beef and lamb continues to increase,” Mr Weeks said.

“Although we’ve seen a drought-induced slide in the last month or so, cattle and sheep prices are still at historically high levels.

“Global demand for lamb has never been stronger, with the value of lamb exports rising a further 12 per cent last year to a record $782 million.

“The global beef market is now worth nearly $11 billion, which is being driven by very strong growth in the domestic market, and increased demand from the US saw goat meat exports grow by $11.6 million last year.

Mr Weeks said the strong performance of the industry had been achieved amid a very challenging trading environment.

“The Australian dollar has appreciated by 50 percent since 2001 and in the past six months the US has gained re-entry into two of our most important beef markets – Japan and Korea,” Mr Weeks said.

“Consumption of beef in North Asia has dropped 360,000 tonnes since 2001, so our challenge is not only to regain this lost consumption by rebuilding confidence in red meat, but to grow that demand and compete strongly for the largest slice of that bigger pie.

“We are also now seeing increased competition from low cost, low priced red meat exporters like China and South America. Brazil’s beef exports last year of over a million tonnes made it the largest beef exporter in the world.”

Mr Weeks said that the Australian lamb industry was performing strongly, with export volumes to all key markets showing continued growth.

“Demand for lamb remains strong domestically and in export markets, with the US and Japan showing particularly strong growth. The main challenge facing the lamb industry will be to expand supply of consistent quality product as these markets continue to grow,” Mr Weeks said.

Mr Weeks said that Australia’s ability to respond to the strong and growing global demand for red meat is likely to be limited by the worsening drought.

“Despite progress made in managing drought, the severity and duration of the current dry threatens to cut cattle herds and sheep flocks over the coming year and lower supply, at least in the short term,” Mr Weeks said.

“The drought has also led to higher slaughter rates, lower branding and lambing rates, an increased use of grain and supplementary feeding and overall an increased cost of feeding livestock.” News Desk
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