December 18, 2008
AACo expects loss for 2008 on weak beef market
Beef producer Australian Agricultural Co (AACo) is expecting to post an earnings loss for 2008 as the global financial crisis knocks down beef prices.
World beef markets are not expected to recover until early next year once inventories in importing countries have been depleted.
"A fortnight out from our December 31 balance date, it is apparent that the business will report an accounting loss,'' said AACo chief executive Stephen Toms.
The world crisis had directly affected soft commodities market since September, said Toms.
Importers in key markets such as the US, Japan, Russia, have failed to secure credit which led to reduced orders and consequently declines in beef prices by 9 percent from September's record high.
However, the cattle market is unpredictable and considerable adjustments can occur during that time, especially if there are good rainfalls in summer months, Toms said.
"Therefore the extent of the loss will not be known until the end of January on completion of a full herd analysis and valuation," said Toms.