Optimism rises despite drought
Despite Australia’s national herd having shrunk by some 14% in recent times due to continuing unfavourable market conditions (see www.leatherbiz.com January 17, 2008), the industry remains very positive about the future for the country’s cattle and beef sectors.
According to Meat & Livestock Australia’s (MLA) 2008 Cattle and Sheep Industry Projections, which have just been released, in spite of a difficult year in 2007, “the Australian cattle industry appears to have survived the long drought largely intact and can look forward to an improved performance over the next five years providing seasons improve”.
Commenting on the outlook, chief market analyst Peter Weeks said that although the cattle and beef industries, including lot feeders and processors/exporters, had suffered widespread losses in the last year due to a severe and prolonged drought, record grain costs, a rising Australian dollar, the partial return of the USA to Japanese and Korean beef markets and weaker US import demand, the industry has proved its resilience and can now look forward to a brighter future.
He stated: “As the drought recedes, cattle producer incomes are set to recover to attractive levels and will be driven by improved on-farm productivity, the elimination of drought-related costs, better local grain availability and some easing in grain costs. Also, prices for breeding stock, cows, heifers, calves and bulls are expected to rise in 2008, as producers move into herd rebuilding. We are predicting a stabilisation of cattle numbers at 28.3 million head by June 2008, before expanding by around 2% in 2008/09 and 2009/10.”
