May 8, 2008

Cattle and beef prices to rise for sustained periods

The world is going to see a sustained period of cattle and beef price inflation as part of a catch-up to farm input price increases, Les Wozniczka, chief executive of Futuris Corp. (FCL.AU) said Wednesday (May 8, 2008).

Warning that the rise in beef prices over the next three to four years might be "quite sharp", he said higher land prices, interest rates, labour and grain prices meant cattle prices would have to rise to give reasonable returns.

Futuris holds a 43-percent stake in beef cattle producer Australian Agricultural Co. (AAC.AU) - the nation's biggest producer of beef cattle. Wozniczka was commenting while explaining why Futuris scrapped a planned sale of its Australian Agricultural stake.

"We are going to be in for a sustained period of cattle price and beef inflation; you're going to be paying a lot more for your T-bones down the track," he told analysts and reporters at a telephone briefing.

Beef could follow in the path of dairy products, which generally have almost doubled in recent years due to supply shortage, he said.