Trends & analysis
The week in review 18/05/12
Season gets chilly as global demand cools
- Late autumn, delivering cooler conditions across most parts of southern Australia, combined with renewed global economic woes, has weighed upon livestock markets this week, somewhat eroding the benefit of the weaker A$. Both cattle and lamb prices were cheaper across most categories this week, with restocker demand waning in response to a dry finish to autumn.
- The softening in the young cattle and restocker/feeder lamb side of the market can largely be associated with a drier stretch of weather (at least by the very wet standard of the past two years), which has seen buyer demand ease. Additionally, in the wake of the better run of seasons, many eastern Australian producers are already carrying larger herds and flocks, and given the dry end to autumn, likely to be taking a more conservative approach to any additional purchases with winter approaching.
- The benchmark EYCI finished Thursday at 363.50¢, back 10.75¢ for the week, while heavy steers nationally dropped 15¢, to average 325¢/kg cwt. Lamb prices contracted 7-16¢ this week, as yardings increased 6%, with trade and heavy lambs averaging 421¢ and 400¢/kg cwt, respectively.
- In what seems to be becoming an unwelcome, but frequent event, global economic uncertainty continues to act as a handbrake on demand and prices for Australian red meat exports. Concerns about Europe and China, and varied news out of the US this week, again increased consumer uncertainty, which sees many importers and end-users across a lot of markets take a very cautious approach to forward orders.
- As such, the global economic uncertainty has helped to fuel the decline in the A$ to below parity this week – which is welcome news, but only provided export demand and prices respond.
Dry and cool week
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The past week saw very little rainfall across most of the country, with only Tasmania and parts of southern Victoria and central WA receiving any notable falls. While there was limited rainfall, much cooler temperatures were recorded across most of the country, characterised by frosts and cold winds.
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With the forecast again for dry weather in the coming week, many producers will be hoping for some rain after a relatively dry autumn.
Red Meat 2000 - 2010: A turbulent decade, a vibrant industry
The recently released Red Meat 2000-2010: A turbulent decade, a vibrant industry report takes a look at the event filled decade the Australian red meat industry has faced. From droughts to the discovery of BSE in Japan (2001) and North America (2003), the global financial crisis in 2008 and the currently high A$, the report captures the peaks and troughs in the industry during the last ten years. It also explains the drivers behind these events.
ABARE Farm Survey
The beef, prime lamb and sheep data collected through ABARE's annual agricultural and grazing industries survey (partly funded by MLA) is available in an online database. Users are able to individually tailor combinations of information for all the annual red meat industry physical and financial data collected through the survey.
Australian beef industry
Australian sheep industry
Access the Farm Financial and Physical Database
Statistical databases from the US Department of Agriculture (USDA) and the Food and Agriculture Organization (FAO) also contain useful information on world production, exports, imports and consumption of agricultural products.
More information
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