Another Challenging Year Ahead For Beef

AUSTRALIA - Australian cattle producers and beef exporters can expect another year of subdued prices and lacklustre export demand – but the low-point in prices should have passed, according to Meat & Livestock Australia’s (MLA) 2010 Cattle Industry Projections.
calendar icon 19 February 2010
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Meat & Livestock Australia

Cattle prices are expected to post only modest improvements in 2010, led by cows and young cattle. Prices for heavy export cattle categories are likely to be the most constrained due to low import demand, the high A$ and increased competition faced from US beef in Korea and Japan.

On the back of the recent rainfall, and a smaller cattle herd due to previous poor branding years, cattle slaughter is forecast to tighten 4.5 per cent in 2010, to 7.4 million head – the lowest since 1996 – and beef production by four per cent, to 2.05 million tonnes cwt.

With tighter supplies, a continued high A$ and intense competition from the US, Australian beef exports are expected to fall 5.7 per cent in 2010, to 875,000 tonnes swt. These factors, plus tenuous economic conditions and higher Korean beef production, is expected to see Australian beef exports to Korea fall 18 per cent, to 95,000 tonnes swt, and to Japan by seven per cent, to 330,000 tonnes.

Despite an expected supply-induced recovery in US beef and cattle prices, the high A$ and lower Australian supplies are expected to limit the recovery in shipments to the US market to only three per cent, or 260,000 tonnes swt.

For 2010, Indonesia is expected to continue expanding both beef and live cattle imports, while exports to smaller markets, including the Middle East, the EU and CIS are also expected to hold firm or expand.

After a jump in total consumption in 2009, the domestic market will remain an attractive outlet for Australia beef, with consumption increasing slightly, to 740,000 tonnes swt in 2010.

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