Record cattle prices aren’t here to stay, cattlemen warned

TERRITORY pastoralists should look beyond recordhigh cattle prices because they are unlikely to be sustained in the long term, a new report says.

The Rabobank report says while prices will stay high for the next 6-12 months, global protein production will put pressure on the Australian beef industry. Animal protein analyst Matthew Costello said global beef production was expected to reach record levels in the next four years.

He said a low domestic supply would drive Australian cattle prices out to 2020.

“While domestic production is set to recover, it will remain below the drought-induced near-record levels we saw in 2013 to 2015, with the Australian herd now at a 20year low,” he said.

In July, Central Australian cattle price records were eclipsed during the annual Alice Springs Show cattle sale.

Total sales reached more than $2.6 million at a $3.33 per kg average – a more than 30 per cent price increase from 2015.

The Rabobank report calls for pastoralists to take a cautious, but optimistic approach to buying stock and expanding production.

“Australian farmgate cattle prices are now the highest of all key producing countries in the world,” Mr Costello said.

“In our view this record pricing cannot be sustained in the medium to longer term.”

Rabobank expects the fall to be less severe than what Australia has previously seen.

“One key point of differ- ence is the outlook for ongoing limited domestic supply – given the reduction in the female breeding base – as well as the diversification of export markets, with demand continuing to grow, particularly in China,” he said.

Rural bank general manager Andrew Smith said improved seasonal conditions across the country had raised confidence in the industry.