September 25, 2008


Australia's cattle prices to move higher

Australian saleyard cattle prices are expected to increase 3 percent in 2008-09, at 295 cents per kg cwt, due to better seasonal conditions across key cattle producing regions tightening turnoff and rising restocker demand, according to the Australian Bureau of Agricultural and Resource Economics (ABARE).


The reducing turnoff is expected to boost herd growth by 0.4 percent to 28.2 million head, ABARE said.


The projected higher prices will be supported by a depreciating Australian dollar, with expected improvements in export prices to the US (up 18 percent) and Japan (up 3 percent).


Increased competition from US beef in North Asia is expected to cut shipments to Japan by 4 percent to 350,000 tonnes in 2008-09, while exports to South Korea is forecast to dip 11 percent to 130,000 tonnes.


Despite higher export returns, shipments to the US during 2008-09 are expected to remain low at 245,000 tonnes, up only 2 percent on-year. Lower domestic cattle supplies and rising global demand for Australian manufacturing beef is forecast to restrict shipments for the year.


Growth in the Russian and Southeast Asian markets are expected to offset the decline of shipments to Australia's three key markets, with total exports for the fiscal year forecast to drop 2 percent at 910,000 tonnes.


Cattle slaughter is also expected to fall 0.9 percent to 8.7 million head.

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