March 22, 2012

 

 

Australia's beef production will rise beyond expectations to a record high this year thanks to herd rebuilding, driven by high cattle prices and bumper feed supplies.

 

Beef output in 2012 will 2.2 million tonnes, USDA attaches in Canberra said - a number above the department's official forecast as well as the expectations of Abares, Australia's commodities bureau.

 

"The fertility of the Australian herd has improved significantly," the attaches said, forecasting that cattle numbers would end the year at a 36-year high of 30.0 million head more than two million head above the official USDA forecast.

 

Livestock farmers have been encouraged to expand both by cattle prices which, at about AUD3.90 (US$4.06) a kilogramme as measured by the Eastern Young Cattle Indicator, remain close to record highs, at a time of bumper feed availability.

 

These dynamics "have provided almost unprecedented confidence among beef producers".

 

The security in supplies of livestock food reflects in part two wet years, notably in eastern areas, which have "promoted excellent pasture growth and greater improved fodder supplies", the attaches said.

 

These rains have also produced two bumper cereals harvests which, due to harvest rains, have seen ample downgrades of food grains to feed.

 

"Record high grain production, combined with weather damage at harvest, has led to record levels of feed quality wheat."

 

Besides record exports forecast for 2011-12, wheat inventories are universally expected to finish at an all-time high.

 

However, Australia's run of agricultural records will not be reflected in beef shipments too, which will be constrained somewhat by the "higher Australian dollar value and increased competition on exports".

 

Enhanced trading terms to US beef by the major importers of Japan and South Korea is expected in both Washing and Canberra to see America, backed by a weak dollar, gain market share over Australian supplies.

 

Nonetheless, at 1.41 million tonnes, Australian beef exports this year will be the third highest on record, and above previous expectations.