March 14, 2005

Cattle prices in Australia drop to three-month low; seen to continue falling

Dry weather parched pastures in Australia and forced ranchers to sell livestock they could not feed. And this has caused cattle prices in the country to fall to a three-month low this year.

Australia is the world's largest beef exporter by revenue.

According to the government's weather forecaster on March 3, drought intensified across central and northwestern Australia in February. The below-average rainfall and the prospect of further price declines has prompted S. Kidman & Co., Australia's third-largest beef producer, to reduce its cattle herd by about 12 percent.

Peter Weeks, chief market analyst with Meat & Livestock Australia, said that cattle prices might continue to fall during the next few months because of the drier weather.

Cattle prices reached a record of A$3.98 a kilogram in September and are still 13 percent higher than a year earlier. Stronger beef demand in Japan and South Korea following bans on US supplies had driven the high prices.