MLA’s Australian cattle industry projections – mid year update, released last month, outlines the combination of the favourable seasonal conditions since the start of 2010, a sharp contraction in female slaughter levels and relatively favourable cattle prices over the 30-month period, underpinned the rebuilding intentions of Australian beef producers.
For the year ending 30 June 2012, MLA estimates the Australian cattle herd increased 4% on the 2011 census result, to 29.65 million, the highest level since 1977.
Australian adult cattle slaughter for 2012 is expected to remain tight, at 7.45 million head, expanding towards eight million head by 2014.
With additional beef entering the supply chain in coming years, the outlook for demand still remains framed by the prosperity in advanced economies, after being plagued by tough conditions since 2008.
In 2012, Australian beef and veal exports are forecast to reach 960,000 tonnes swt, up 1% on the previous year.
As projected by MLA in January, the US has been the main growth market for Australian shipments in 2012.
While there have been brief periods of robust sales and a more positive economic outlook during the past four years, the massive debt, unemployment and growth issues for many economies continue to weigh heavily on Australia’s beef trade.
It seems to be for every step forward in beef demand, it takes a step back – each time favouring cheaper prices as consumers continue to ‘trade down’ in their purchasing preferences.
However, one key factor that remains unaltered, is the decline in global beef production.
While this has put upward pressure on prices at times, there have also been periods where it has been overshadowed by the larger economic and demand issues.
The big question is: what force will be greater going forward?
Download MLA's Australian cattle industry projections - mid-year update.
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