September 18, 2006
Australian cattle supply up but prices remain unchanged
Despite a nine percent jump in the number of cattle major centres, market prices have remained steady, Meat & Livestock Australia reported Friday (Sep 15).
In eastern Australia, the critically low levels of feed and water available, may have prompted many producers to sell last week, MLA said.
More than half the young cattle offered were bought by processors while lotfeeders bought a quarter. Restockers accounted for just one-fifth of the purchases.
Prices across most categories of young cattle have stabilised.
Value of beef exports in the last fiscal year ended Jun 30 slipped 7 percent to A$4.54 billion (US$3.4 billion) due to drops in volume.
As Japanese wholesalers were buying only what they needed, even with presently tight stocks, prices have been little changed.
Even though Japan has opened its doors to US beef, supplies have been trickling in, averaging no more than 200 tonnes so far due to relatively strict conditions attached.
Japanese media estimates that under current conditions, US beef imports are unlikely to exceed 2,000 tonnes a month. Given the circumstances, beef prices in Japan are expected to be steady and demand for Australian beef would remain strong, it said.
Meanwhile, Australian export prices have risen an average 5 percent since the return of US beef, and export volumes have been maintained.
In the US, imported manufacturing beef remains in tight supply, supporting prices at high levels with one major grade maintaining a premium to the domestic fresh counterpart, MLA said.
In South Korea, despite a conditional restart for US imports last week, there are still steady inquiries for Australian beef, MLA said.
US beef exports to South Korea could reach 130,000 tonnes next year, or half the total volume before it was banned in 2003. Coupled with higher production in South Korea itself, these developments are expected to bring down Australian beef export prices slightly next year.
