Beef market holding strong
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.