High prices make producers optimistic

Strong numbers: Despite a decline in prices late last year, Australian cattle producers begin 2017 in a good position due to an initial 2.8 per cent increase in prices. Photo: File.Cattle producers in New South Wales will be coming into the new year with confidence as the price of Australian cattle remains high, according to a new report.
Nanjing Night Net

Despite a decline in prices late last year, Australian cattle producers begin 2017 in a good position dueto an initial 2.8 per cent increase in prices.

The report, from the Rural Bank and Rural Finance’s January 2017 Australian Cattle Update, found that

Andrew Smith, General Manager Agribusiness for Rural Bank and Rural Financesaid said western NSW contributed overallto 22 per cent of Australian beef production.

The report found thatgood pasture conditions seen during winter and spring in 2016 are expected to have put good weight on slaughter cattle earlier than normal.

“Adult carcase weight in western NSW is three per cent higher than last year,” Mr Smith said.

As a result, slaughter numbers are expected to be good in early 2017 before tightening again after autumn.

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Restocking activity is expected to continue, weather depending, which will contribute to slaughter rates trending lower over the course of the year.

The new report also revealed beef export volumes have dropped further below 2015 levels with the latest November data showing a year-to-date decline of 21.2 per cent. Increased production in the US, combined with tight supplies and high prices out of Australia, has led to a 44 per cent drop in year-to-date exports to the US.

The lower volumes of beef exported to the US has also meant that Japan has once again become Australia’s number one beef export market.

“With global cattle prices trending lower, a correction for Australian prices appears likely later in the year. We will be keeping an eye on global price trends, restocker demand and slaughter rates through the year as the key drivers of price movement,” Mr Smith said.

“Overall I think the outlook is pretty good for Australian beef producers.”

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