August 17, 2009

Australian beef sector seen to expand in 2010

The Australian beef industry may have weathered the worst of the turbulent trading conditions arising from the global economic and financial crises, with its early signals that beef demand is staging a comeback according to Meat & Livestock Australia's (MLA) 2009 Cattle Industry Projections - Mid Year Update.

Improved demand in mid 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 A$ and spring rains.

Beef and veal production in 2009 is predicted to fall 2.5 percent on 2008, in contrast to the small rise forecast in MLA's projections in January - a result of lower than expected feedlot output; lower offer prices; lighter average carcase weights; and improved seasonal conditions - in the north and more recently in the south - encouraging producers to rebuild herds.

Australian adult cattle slaughter is forecast to reach 8 million head in 2010, up 4 percent on 2009's 7.7 million head.

The Australian cattle herd is forecast to expand to 28.4 million head by June 2010, up 2.3 percent from 2009 and building towards 30 million by 2013. The full impact of herd rebuilding on turnoff, season permitting, is not expected until at least 2011, with beef production in 2010 rebounding from this year's lower level but only back to levels seen in 2006 and 2007.

Reduced cattle availability in 2009 will also take its toll on the live export trade, with exports forecast to fall 3 percent despite strong demand, particularly in Indonesia and the Middle East. However, as cattle supplies are restored, exports are expected to rise to 925,000 head by 2013, up 8 percent on 2008.