August 14, 2009

Australia's beef demand will stage a comeback but it is still early and some factors may hinder the speed of recovery, according to a MLA report.

Those factors included the direction of the Australian dollar, whether the southern drought recedes and the timing of a turnaround in global economies.

MLA economist Tim McRae said exporters are still grappling with tight livestock supplies, the appreciating Australian dollar, weak co-product prices and low import prices.

McRae predicts the recovery may not come until 2010 when exports will start to really gather steam and when volumes are forecast to approach the one million tonne mark as the Japanese, Korean and US economies revert to growth.

He also points out that improved demand over the latter part of 2009 is likely to coincide with tight beef supplies on the back of improved seasonal conditions and herd rebuilding activity - an imbalance which may cause cattle prices to rise, depending on the direction of the dollar and spring rains.