A Cracking Year For Beef Producers

ANALYSIS - Both beef and cattle prices have, in general, been on a high this year. Global beef trade is strong, with the US, Europe and Australia all reporting booming markets.
calendar icon 21 December 2011
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Prices have increased by 26 per cent in some countries and tight supplies are expected to keep prices strong in the coming year.

Foot and mouth disease hit Asia hard at the start of the year - particularly China and South Korea. In both countries the effects of the disease will continue to take their toll in the New Year, with breeding herds down and a heavy dependence on imports.

In Australia, live cattle exports to Indonesia closed down between May and July, after undercover footage showed the inhumane treatment of Australian cattle in Indonesian abattoirs. This has caused serious problems for the industry that exports 60 per cent of all cattle to Indonesia.

The use of antibiotics in animal production has also caused a great deal of concern this year. With the suspected risk of increased resistance, there have been calls in the EU and the US to limit their use. The EU authorities are actively looking to reduce antibiotic use, with governments setting clear targets.

However, the US Food and Drug administration has never said that the use of antibiotics in animals needs to be reduced, rather that withdrawing them would be too expensive.

Today, the EU released estimates stating that real agricultural income per worker has increased in 2011.

The increase in this value is put down to strong commodity prices for crops and livestock. However - income does not relate to profit and agricultural input costs are expected to rise by 10 per cent in real terms.

There are ever increasing pressures on the cattle industry, with demands from the public, government and industry ranging from animal welfare to improved efficiency. Although there are strong prices, input costs will continue to rise, squeezing margins, and producers will have to look hard at how to reduce costs of production next year.

Charlotte Johnston, Editor

Charlotte Johnston - Editor

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