Bu­reau fore­casts bright out­look for beef stock Back in the game

Townsville Bulletin - - Investor - by Martin Rasini martin. rasini@ townsville­bul­letin. com. au

A FED­ERAL gov­ern­ment a g e n c y i s f o r e c a s t i n g a bright out­look for beef but stock and sta­tion agents are di­vided as to how the in­creased de­mand will im­pact on the mar­ket for graz­ing prop­er­ties.

The Aus­tralian Bu­reau of Agri­cul­tural and Re­source Eco­nom­ics and Sci­ences ex­pects higher prices in the medium t erm f or cat­tle, cou­pled with herd and prod u c t i o n g r o wt h a n d i n - creased ex­ports.

The bu­reau, which un­veiled its view some days ago, fore­casts cat­tle prices will show an 11 per cent rise for the 12 months to July and a fur­ther in­crease of 5 per cent in 2011-12.

It fore­casts the na­tional herd to grow by 2 per cent in 2011-12 to 27.9 mil­lion and to reach 28.7 mil­lion head by the end of the 2016-16 fi­nan­cial year.

ABARES said beef and veal ex­ports will rise gen­er­ally by 2 per cent in 2011-12, with ex­ports to Ja­pan to rise by 3 per cent from 368,000 tonnes, to Korea by 6 per cent from 132,000 tonnes, and to the US by 3 per cent from 190,000 tonnes.

BUOY­ANCY RE­TURNS: A newly re­leased re­port pre­dicts cat­tle prices will rise by 11 per cent for the 12 months till July

‘‘ The emer­gence of Rus­sia will in­ten­sify competition for Aus­tralian beef, with ex­ports fore­cast to reach 80,000 tonnes by 2015-16,’’ it said.

Ray White Townsville’s Kevin Cur­rie said yes­ter­day while higher prices and ex­panded ex­ports will im­prove cash flow, it was the in­debt­ed­ness of the in­dus­try that was hold­ing back the ru­ral prop­erty mar­ket.

‘‘ Un­til three years ago, fina nci a l i ns t i t ut i o ns were happy to lend a very high per­cent­age of the value of a p r o p e r t y , w h e r e a s p r e - vi­ously 40 per cent had been con­sid­ered high,’’ he said.

‘‘ Since then, they have put strin­gent lend­ing cri­te­ria in place.

‘‘ So now, peo­ple find it dif­fi­cult to bor­row with the re­sult that de­mand for prop- erty is weak.

‘‘ Cash flow may im­prove but, for many, the funds will go to­wards re­tir­ing debt.’’

L a n d m a r k T o w n s v i l l e agent Alan Bod­man took a more pos­i­tive view.

‘‘ Cou­pled with the ex­cel­lent sea­son, it is the best out­look for the in­dus­try in quite some years,’’ he said.

‘‘ You would think a more buoy­ant mar­ket for beef would lead to im­proved trad­ing con­di­tions gen­er­ally and bring some mo­men­tum to t h e ma r k e t f o r g r a z i n g prop­er­ties.’’

Lorin Bishop, of El­ders in Char­ters Tow­ers, said the fore­cast gave cause for cau­tious op­ti­mism.

‘‘ Pro­jec­tions of in­creased earn­ing power will help con­fi­dence, which should help the mar­ket,’’ he said.

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