Australia Report Paints Optimistic Market Picture

Meat & Livestock Australia's 2009 Cattle Industry Projections show a turnaround.

Published on: Aug 13, 2009

There is a growing consensus in Australia and around the world that global economies will stage a recovery later this year. A report titled Meat & Livestock Australia's 2009 Cattle Industry Projections- Mid Year Update, says beef demand in that Southern Hemisphere nation is staging a comeback. However, it is still early and some factors could hinder the speed of recovery. Those factors included the direction of the Australian dollar, whether the southern drought recedes and the timing of a turnaround in global economies.

MLA economist Tim McRae says exporters are still grappling with tight livestock supplies, the appreciating Australian dollar, weak co-product prices and low import prices. McRae predicts the recovery may not come until 2010 – that's when exports will start to really gather steam, when volumes are forecast to approach the one million ton mark, as the Japanese, Korean and U.S. economies revert to growth.

McRae points out that improved demand over the latter part of 2009 is likely to coincide with tight beef supplies on the back of improved seasonal conditions and herd rebuilding activity – an imbalance which may cause cattle prices to rise, depending on the direction of the dollar and spring rains.