Beef mar­ket hold­ing strong

Central and North Rural Weekly - - NEWS - James Wagstaff news@ru­ral­

PRICE mar­gins will con­tinue to move and “move sub­stan­tially” along the Aus­tralian beef in­dus­try sup­ply chain, Aus­tralian Agri­cul­tural Com­pany boss Ja­son Strong says.

Speak­ing at Yulgilbar Santa Gertrudis stud’s beef expo in north­ern NSW re­cently, Mr Strong said sup­ply and de­mand was the one fac­tor that would drive the move­ment of the mar­gin up and down the sup­ply chain.

Aus­tralia’s largest beef pro­ducer, AACo runs grass-fed and grain-fed cat­tle, beef brands and a ge­net­ics busi­ness on seven mil­lion hectares of land in Queens­land and the North­ern Ter­ri­tory. It also has its own pro­cess­ing fac­tory and kills up to 500 cat­tle a day.

In an ad­dress on ver­ti­cal in­te­gra­tion in the sup­ply chain, he said beef was “about the most ex­treme case of a sup­ply-de­mand prod­uct in the mar­ket that you could ever find”.

“If there’s one more cow, the price goes down, if there’s (one fewer), the price goes up,” Mr Strong said.

“I don’t want to sound over sim­plis­tic, but that is the prob­lem. There’s about 10 chunks of the sup­ply chain and there’s only about two ... that have any real con­nec­tion through to the end value of the prod­uct.

“There is only one group of peo­ple who ac­tu­ally cre­ate the true value ... pun­ters who pay for their meat. There’s very, very lit­tle con­nec­tion be­tween a back­grounder and a feed-lot­ter to the value of the prod­uct that goes to a con­sumer in Singapore.”

From a pro­ducer per­spec­tive, beef prices fell again last week with the bench­mark Eastern Young Cat­tle In­di­ca­tor down a fur­ther 16.75c/kg to end Mon­day trad­ing at 566.25c/kg car­cass weight. The in­di­ca­tor has fallen 89c/kg (14%) since the start of June. It is trad­ing at 132c/kg, 19% down on this time last year.

Meat and Live­stock Aus­tralia man­ag­ing direc­tor Richard Nor­ton said by selling “high-value beef across the world” Aus­tralian beef pro­duc­ers were not sim­ply a com­mod­ity player and needed to iden­tify their point of dif­fer­ence.

“It’s our en­vi­ron­ment and it’s our in­tegrity sys­tems and the way we man­age our an­i­mals’ wel­fare,” Mr Nor­ton said.

MLA said it would invest al­most $28 mil­lion in the next five years on re­search into the ob­jec­tive mea­sure­ment of eat­ing qual­ity. Re­search would in the pro­cess­ing sec­tor and on farm.

There is only one group of peo­ple who ac­tu­ally cre­ate the true value... pun­ters who pay for their meat. — Ja­son Strong


LEADER IN THE FIELD: AACo’s CEO Ja­son Strong said sup­ply and de­mand con­tin­ued to drive beef prices across the coun­try.

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