Australian Cattle Prices Plunge to Lowest Since 2003 on Drought

AUSTRALIA - Cattle prices in Australia, the world's second-largest beef exporter, fell to the lowest in almost four years as the worst drought in a century cut demand from ranchers and feed prices soared.

6 December 2006

1 minute read

Oceania

Cattle prices in Australia have slumped 27 percent this year as the worsening El Nino-driven drought cuts pasture supply, forcing ranchers to flood sale yards with livestock they can't feed. Animal feed prices have risen in line with the 74 percent rise in the price of corn and wheat's 51 percent advance.

"The longer this dry weather goes on, the less chance prices have of recovery," Tobin Gorey, commodity analyst at Commonwealth Bank of Australia Ltd., said in an interview from Sydney. "There's not a lot of crops around from this year's winter crop so it's expensive anyway and the pasture growth isn't going to be there if it's dry."

The benchmark Eastern Young Cattle Indicator, which measures auction prices at sale yards in eastern Australia, fell 0.7 percent to A$2.6525 ($2.09) a kilogram yesterday. That's the lowest since Feb. 19, 2003.

Source: Bloomberg