Bureau forecasts bright outlook for beef stock Back in the game
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.