SENIOR government agriculture economists appear to be putting more weight in international beef trade dynamics than other analysts, forecasting a 15 per cent fall in saleyard cattle prices this financial year as a flow-on of red hot competition in markets like Japan and the United States.
The Australian Bureau of Agricultural and Resource Economics and Science (ABARES) has the 2017-18 weighted average saleyard price of beef cattle at 455 cents per kilogram, which is slightly lower than many in the industry expected.
That will mainly be driven by lower prices in Australian beef’s major export markets but will also reflect a lift in cattle supply courtesy of better seasonal conditions that has driven a rebuild, albeit mostly in the south, according to ABARES.
Much industry analysis of the 2017 cattle market story pointed to restockers and grass fever domination proving a more powerful influencer than the end-point downward pressure being exerted at a global level.
As a result, estimates so far on the overall cattle price fall this financial year have been smaller.
At the moment the fickle nature of where the rain is arriving, particularly in Queensland, means very few in the game are willing to put their name to much regarding cattle market fluctuations.
ABARES says up until 2021, intensified competition globally and the expansion of supply in Australia, assuming an average season, will push prices down.
In four years, the average saleyard price will be 5pc below the 2018 projection, it says.
Still, that is 12pc above the ten-year average of 389c/kg.
ABARES experts have singled out competition from ramped up United States’ beef production, which is overflowing into export markets and often directly targeting key Australian customers, as one of the main influencers in the medium term.
However, stiff competition is also expected from South American exports to China.
Despite rising volumes, ABARES says export prices will decline from $7.6 billion this financial year to $7.3b by 2023.
As is the case in most of the major beef exporting nations, projections from numerous sources are pointing to a lift in Australian beef production this year.
ABARES has it at 8pc to 2.2 million tonnes carcase weight. Out to 2023, it is expected to remain around the 2.4m tonnes mark.