July 17, 2006

 

Australia's beef prices strong as exports progress

 

 

Beef cattle prices in Australian saleyards settled mixed this week, although young cattle prices have continued to rise, Meat & Livestock Australia (MLA) said Friday (Jul 14).

 

Lotfeeder demand and additional restocker competition were the main contributors to the rise, it said in a weekly market review. Forecasts of rain in eastern Australia have added to restocker competition in northern markets, giving rise to higher prices, MLA said.

 

Trade steer prices fell as demand from processors fell, as some processors reduce slaughter rates rather than increase bids.

 

However, the overall rise in prices may encourage farmers to place animals in feedlots or buy feed for cattle as drought in eastern Australia reduces pasture available. Cattle prices are now attractive enough to encourage this as feed prices are at affordable levels.

 

Cattle prices have also gained on reduced supply as ranchers in northern Australia hold back cattle from sale. Some producers have been hard put to put up cattle that fit weight for age specifications due mostly to poor winter pastures.

 

Surplus feed is causing farmers to hold back cattle, with some even buying new ones in Northern Australia.

 

Generally, Australian beef export prices in Japan fell, while those in the US rose.

 

Export demand is an important factor influencing prices in domestic saleyards as most of Australian beef is exported.

 

Strong demand for Australian beef resulted from a lack of competition from the US in Japan and South Korea.

 

Sales to Japan, Australia's biggest market for the meat, reached 388,000 tonnes in the year ending Jun 30, the second highest on record

 

However, demand cooled this week, with buying ahead of summer's Obon festival in mid-August almost finished and the next month is expected to be quiet, MLA said.

 

A recent shortage of grassed product in Japan also boosted prices in Japan's wholesale market last week, it said.

 

Lower beef imports and the resulting higher prices continue to restrict Japanese beef consumption, MLA said.

 

Japanese beef consumption for the first five months of 2006 is 5 percent down from the year-earlier period, and 18 percent down from pre-ban levels.

 

In South Korea, prices rose again as buyers competed for limited supplies as they prepare for the South Korean Thanksgiving, held this year in October.

 

As the resumption of US beef trade in South Korea is still uncertain, demand for Australian beef in the Korean market should be strong over the next few weeks, MLA said.