August 8, 2011


Impending global economic turmoil to hit livestock prices



The impact of another global recession is foreseen to ripple through red meat and livestock prices worldwide over the coming months with the overall economic outlook deteriorating rapidly over the past week.


While the six-cent depreciation in the Australian dollar over the past week will be welcomed by Australian exporters, increased currency volatility and economic uncertainty can have just as great an impact on buying intentions. As witnessed in the early days of the GFC, a volatile currency caused just as many issues as a high one, with both importers and exporters very hesitant to lock in forward trades.


Another issue weighing upon livestock markets is that several regions of eastern Australia are anxiously awaiting the next major rainfall event. Pastures and crops are showing signs of a relatively dry winter, whereby producers are reportedly weighing up marketing options, especially through central and northern New South Wales.


The EYCI recovered this week from last week's falls, jumping AUD0.105 (US$0.11), to finish Thursday at AUD3.81/kg (US$4.05) cwt - the highest daily level since mid-July. A decline in numbers suitable for the EYCI and reportedly strong competition from feeders assisted the recovery in prices this week.

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