The Stock Re­port Slow­ing sup­ply to boost prices

Tasmanian Country - - STOCK REPORT -

STRONG prices for Aus­tralian sheep and beef pro­duc­ers look set to con­tinue next year.

Rabobank’s lat­est Global An­i­mal Pro­tein Out­look re­port says that de­spite trade ten­sion and high feed prices, lim­ited sup­plies and strong de­mand will keep prices firm.

How­ever, the pro­duc­tion ca­pac­ity of Aus­tralia’s beef herd and sheep flock will be lim­ited by heavy culling of fe­male cat­tle and sheep in 2018.

Any up­side will de­pend on im­proved sea­sonal con­di­tions in the year ahead.

The re­port fore­casts a slow­ing in the pace of growth for meat pro­duc­tion in most re­gions through­out the world next year.

Global an­i­mal pro­tein pro­duc­tion of beef, pork and poul­try is ex­pected to ex­pand by just over one mil­lion tonnes in 2019, well be­low the five-year av­er­age growth rate, to 500 mil­lion tonnes.

Pro­duc­tion growth will slow across nearly all key re­gions, with China pre­dicted to see a sub­stan­tial pro­duc­tion de­cline, driven by the im­pacts of African swine fever on its pork sec­tor.

Brazil’s live­stock pro­duc­tion, how­ever, is fore­cast to con­tinue its strong growth tra­jec­tory while the pro­duc­tion out­look for North Amer­ica is also rel­a­tively strong,

In Aus­tralia sheep­meat and beef pro­duc­tion will de­cline and the same ap­plies to New Zealand.

The over­all re­strained global ro­duc­tion out­look will pro­vide some up­side on price.

Rabobank se­nior an­i­mal pro­teins an­a­lyst An­gus Gi­d­leyBaird said strong global de­mand for sheep­meat and lim­ited sup­ply would sup­port strong prices through 2019.

New Zealand, the world’s other ma­jor sup­plier of sheep­meat, is set to have its low­est lamb kill on record next year.

“While fur­ther up­side be­yond record 2018 sheep­meat prices will be lim­ited, prices will re­main firm, given strong de­mand in key global mar­kets such as the Mid­dle East, China and the US,” he said.

Lamb pro­duc­tion in Aus­tralia will re­main re­stricted in 2019, im­pacted by higher sheep sales in this year due to dry weather con­di­tions.

The re­port says Aus­tralia’s beef-cat­tle num­bers will re­main very low fol­low­ing heavy de­stock­ing be­tween 2013 and 2016 and then again in 2018.

Mr Gi­d­ley-Baird said cat­tle num­bers would re­main steady at the cur­rent low un­til con­di­tions im­prove.

“While lim­ited sup­plies sup­port cat­tle prices for pro­duc­ers, sup­ply-chain ef­fi­cien­cies will be tested, with lower vol­umes avail­able for feed­lots and pro­cess­ing,” he said. “And with­out sub­stan­tial rain, 2019 will test many pro­duc­ers, given al­ready-lim­ited and ex­pen­sive fod­der sup­plies.”

Rabobank ex­pects Aus­tralian beef pro­duc­tion vol­umes to fall with lower slaugh­ter num­bers and ex­port vol­umes will also drop slightly in 2019.

On the pos­i­tive side, Mr Gi­d­ley-Baird said a num­ber of coun­tries, in­clud­ing Aus­tralia, were ex­pected to ben­e­fit from weaker cur­ren­cies.

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