Australia beef hurt by high supply, weak demand

Australia's beef cattle prices are decreasing due to higher supply and weaker demand in export markets, according to the Meat & Livestock Australia (MLA).

Exporters face continued problems with credit and stocks and fear of even weaker demand, said MLA.

These problems and the resulting absence of purchases from South Korea and Russia continue to delay the anticipated lift in sales and prices of Australian beef arising from the competitive Australian dollar, said MLA.

South Korea and Russia were the third- and fourth-largest export markets for Australian beef last year, in an annual trade worth about A$4.5 billion (US$3 billion) per year.

MLA said the resumption of buying by South Korea and Russia, and an associated price increase from Japan and the US, remain uncertain but could still commence by March or April this year.

High temperatures are drying out and downgrading pastures in southern Australian cattle districts, pushing producers to sell their cattle and take the price on offer now for fear of prices falling further, it said.

Australia's beef exports to South Korea fell 15 percent in 2008 to 127,206 tonnes. While exports to Russia increased 14-fold from the previous year to 72,214 tonnes, shipments had slowed since April as the impact of the global financial crisis crushed the purchasing power of importers.