Cost of Australian red meat set to fall

By Oscar Rousseau contact

- Last updated on GMT

Australian cattle prices are not predicted to fall below the pre-2013 levels
Australian cattle prices are not predicted to fall below the pre-2013 levels

Related tags: Meat

For the first time in three years, Australian cattle prices are lower than they were 12 months ago and, with production up, the price drop has caused some concern.

The beef market is set to face some “downward pressure​” after red meat production increased and cattle prices dropped, according to levy board Meat & Livestock Australia (MLA).
After three years of year-on-year cattle price rises, MLA’s manager of market information Ben Thomas said the writing was on the wall in June. Last month, eastern Australian states’ slaughter rates consistently tracked ahead of the previous year for the first time since 2014. At the same time, cattle prices dropped for the first time in three years.

‘Good run’ coming to an end

These trends are likely to remain in place for the remainder of 2017 and have a significant impact on price and production expectations,​” Thomas explained.

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 has now changed, though we’ll remain well above that five-year average for the foreseeable future.​”

MLA​ does not expect cattle prices to fall below the pre-2013 levels, partly due to a stagnant Australian dollar and continuing herd restocking as pasture conditions improve for farmers. Thomas did concede that the low rates of female cattle slaughter, necessary as Australia rebuilds its herd, had “impacted many parts of the industry​”.

He added: “After the first four months of 2017, female cattle slaughter was just 973,000 head – the lowest since 1995 and representing 45% of the overall adult kill, 3% below the 10-year average of 48%.​”

While there is pressure domestically on Australian beef producers, MLA expects a fifth consecutive year of beef exports surpassing one million tonnes.

Related topics: Analysis, Australia, Beef

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