Prices of do­mes­tic cat­tle set to ease

NT News - - BUSINESS -

A com­bi­na­tion of in­creased cat­tle sup­ply, re­duced pro­ducer de­mand and weaker global prices will see do­mes­tic cat­tle prices ease back from the highs reached in 2017 to sta­bilise at just above five-year av­er­ages, ac­cord­ing to agribusi­ness bank­ing spe­cial­ist Rabobank.

In its just-re­leased Aus­tralian 2018 Beef Cat­tle Sea­sonal Out­look, Rabobank said cat­tle slaugh­ter num­bers were ex­pected to rise marginally and over­all Aus­tralian beef pro­duc­tion to in­crease by 3 per cent for the year.

Rabobank se­nior an­i­mal proteins an­a­lyst An­gus Gi­d­ley-Baird said while the cat­tle price de­clines would more than off­set the small rise in pro­duc­tion, im­pact­ing on pro­ducer in­comes dur­ing 2018, the out­look was still for an over­all prof­itable 2018 for Aus­tralia’s beef pro­duc­ers.

Mr Gi­d­ley-Baird said Aus­tralian beef pro­duc­tion was fore­cast to rise slightly as the herd re­build con­tin­ued.

“Af­ter fall­ing by 1.7 per cent to 7.16 mil­lion head in 2017, we ex­pect cat­tle slaugh­ter to rise slightly in 2018, with herd re­build­ing over the pre­vi­ous two years in south­ern states now ex­pected to start gen­er­at­ing in­creased turn off,” he said.

Aus­tralia’s key beef ex­port mar­kets are ex­pected to re­main strong but an in­crease in com­pe­ti­tion would “limit price up­sides”.

“Japan, the US, South Korea and China will re­main key mar­kets. How­ever, we will see in­creased com­pe­ti­tion from other ex­port­ing na­tions in all these mar­kets,” Mr Gi­d­ley-Baird said.

The Rabobank re­port fore­casts 2018 do­mes­tic cat­tle prices to come in at 15 per cent be­low prior-year lev­els. The Eastern Young Cat­tle In­di­ca­tor is ex­pected to av­er­age AUc 513/ kg cwt for the year — just above the five-year av­er­age.

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