Drought Drives Supply – When Will it End?04 July 2014
AUSTRALIA - The 2013-14 financial year will be remembered distinctly differently by northern and southern producers – a crippling drought for the north, while in contrast, southern producers had a tough start, before an excellent autumn break, according to analysts at Meat and Livestock Australia.
Fuelled by the widespread northern drought, cattle slaughter surged at unprecedented levels for the entire year, driving exports to sustain their record pace. Interestingly, the beef export portfolio continued to change, with shipments to the US almost overtaking Japan for the first time in a decade, while China’s intake continued to grow.
While exports surged over the period, cattle prices only improved in the second half of the year, with plenty of support offered from the southern markets.
MLA said that whilst slaughter levels surged, so too did live cattle exports, which on top of the reported lower branding rates, caused the national cattle herd to decline from the highs of 2012.
Similarly for sheep and lamb, slaughter levels surged, causing exports to reach a financial year record. Unlike beef, however, sheep and lamb prices maintained high levels, assisted not only by the strong export demand, but also limited competition from the only sizeable competitor, New Zealand.
Going forward, the ongoing reports of an El Niño raise concerns for many producers, especially those with already low feed and stock water levels.
Additionally, the question as to how much longer current cattle, sheep and lamb slaughter levels can be maintained continues to be raised, particularly on the back of the unprecedented levels seen throughout 2013-14.TheCattleSite News Desk