December 20, 2006

Australian saleyard cattle prices down in 2006-07

The Australian weighted saleyard indicator price of beef cattle is forecast to fall by 13 percent in 2006-07 according to the December edition of Australian Commodities, released this week by the Australian Bureau of Agricultural and Resource Economics (ABARE).

This projection was based on low pasture availability and high feed prices, which could result in an increase of 7 and 4 percent respectively for cattle slaughter and beef production.

Meanwhile, Australian beef exports could rise by 6 percent in 2006-07, to 945,000 tonnes swt, reflecting increased domestic production and higher import demand from South Korea and the US, according to ABARE estimates.

Beef exports to South Korea could increase by 11 percent to 134,000 tonnes in 2006-07. Factors contributing to the rise include uncertainty about South Korean conditions for the import of banned "bone-in" beef from the US and the low level of beef stocks in South Korea.

However, US exports to South Korea are not expected to increase significantly in the near future.

Australian beef exports to the US are forecast to increase by around 2 percent to 300,000 tonnes swt with strong import demand from the US underpinned by the lower availability of manufacturing beef imports from Uruguay.

Exports to Japan on the other hand, are forecast to fall by around 3 percent to 378,000 tonnes swt during the same period. Demand for Australian beef in Japan has remained relatively strong in 2006, despite a resumption of trade between the US and Japan.

ABARE anticipates a rise in Japanese imports of US beef in 2007 as the US adapts to Japan's import protocols.