March 3, 2004 

Australian Beef Prices To Fall In The Medium Term

The Australian Bureau of Agricultural and Resource Economics (ABARE) have forecasted a fall in beef prices in 2004-05 as restocking demand eases and U.S. exports resume.

ABARE's Dr Terry Sheales said while mad cow related beef bans may result in volatility in the short term, prices in the medium term will ease as domestic supply rises and competition in international beef markets increases.

Sheales also stated some of the challenges facing the beef industry. He said that, "to maintain profitability over time the beef industry will need to continually improve productivity at all stages in the supply chain and seek to increase export market access, as competition from other meats, particularly poultry, grows."

John Griffith, Managing Director of AustAsia Pty Limited, discussed the prospects for the live export trade. "The live export trade is vitally important to the northern beef industry and has significant flow on benefits for the local economy," he said.

"In the short term, live exports will be constrained by weak economic conditions in the Middle East, a strong Australian dollar and competition from domestic beef in South East Asia," he added. "However, over the longer term demand for live cattle is likely to increase. Customers in many markets will continue to demand live cattle to supply fresh markets rather than imported chilled or frozen beef, regardless of improvements in refrigeration facilities."

David Foote of Australian Country Choice, discussed the benefits from value-based marketing. "Poor management, resulting in problems such as bad meat color or ticky hides can reduce the final value from processed animals by up to half," he said.

"Better meeting of specific market requirements and a focus on ensuring adoption of best practice and improvement in operating standards will increase returns to beef producers," he added. "Better returns for both producers and processors are possible through increased commitment, communication, transparency and risk sharing in a value based direct marketing framework."