October 19, 2007

Further beef price hikes seen for Australian beef

The Australian cattle feedlot sector has warned of beef price hikes due to drought and increased grain 3demand from biofuels industry.

The cattle feedlot industry has become the latest producer group to caution consumers to expect a big jump in retail prices amid the increasing prices of grain and dairy.

The Australian Lot Feeders Association (ALFA) says as grain prices now at record levels and can likely go higher, it is leading to a 22 percent drop in the number of cattle on feed in the last quarter.

ALFA spokesman Jim Cudmore says consumers can expect the price of beef to spike by the end of the year.

Less cattle on feed means there'll be a general contraction with grain feed supply, which can impact foreign and local consumers, he said.

Depending upon where a view of grain prices going forward in the next six to 12 months, will depend on how great that contraction becomes, but Cudmore says there will be certainly an increase in beef costs at some point.