August 20, 2010

Australian beef producer struggles in Asian market

McDonald Holdings, one of Australia's major beef cattle processors, has been struggling to sell its product for the past two weeks.

There's been serious volatility in the wheat market in the past month and concern about northern hemisphere crops has seen prices on a rollercoaster, making it an expensive time for feedlotters.

Zanda McDonald, from McDonald Holdings, says the cost of feeding his cattle is increasing by AU$0.40 (US$0.35) a head every day. He says Asian buyers, his main customers, are well aware of what's happened with the grain price in Australia.

"All they're trying to do is survive over there and buy meat as cheaply as possible," he says. They're blaming the recession and the exchange rate and everything else. But certainly, the higher inputs in Australia doesn't come into their argument when they're trying to buy meat at a lower price, but they certainly are aware of it and we're using that every day as a bargaining tool trying to increase the price or even just to sell our product at the moment," McDonald said.