December 21, 2009

Drought strikes Australian cattle industry yet again

The majority of Queensland and New South Wales states in Australia have fallen back into severe drought, after an initial improvement in seasonal conditions for the cattle industries there.

Cattle prices have ended the year 15% below a year ago, and average 5% lower than 2008 for the year.

With the northern monsoon commencing, the Australian dollar back below 90US¢ and the prospect of tighter supplies in the New Year, prices could start 2010 a little higher.

But price response to any widespread rains will be limited, as processors will cut shifts or remain closed for longer rather than operate at a loss, given the current low export demand and prices.