THERE was a touch of inevitability about the skyrocketing price of beef recorded since the resumption of markets in 2015.
I am not one who would normally gloat about actually predicting this happening, but there was overwhelming evidence to suggest that through sheer lack of numbers prices had to lift substantially.
The million dollar question for some is how long can this last? The answer to that question ought to be simple - speeding up the breeding process is virtually impossible, so the supply and demand equation should remain in favour of the producer for several years.
We basically have the supply portion worked out. Drought has conspired to lay the foundation for a beef boom for those with cattle, a cruel fact but a fact of life nevertheless.
All we have to worry about now is the opposite side of the coin and hope that processors, live exporters and butchers have the strength and wherewithal to weather the price storm.
Despite all of the hype surrounding the opportunities created by the signing of significant free trade agreements with Japan, South Korea and China, we really don't know the ramifications of these agreements and how things will pan out. The intricacies involved in the world of meat exporters are beyond my knowledge and most laymen can only guess at the protocols and agreements that go into sending our beef to overseas destinations.
I would like to know the process that exporters go through to secure an export order, either live, frozen or chilled. Do they tender a price for a certain commodity? Are they locked into a contract at a fixed price? Are there any get out clauses that allow for rising prices? Are our trading partners so keen to access Australian beef that they will keep looking our way to fulfil their needs, despite substantial price increases?
So many questions, so few answers. Some producers are so busy savouring the fruits of this little boom that they haven't seriously given the future much thought.
The numbers that have been flushed out by the high prices are quite amazing. Saleyards all over the country are experiencing huge numbers for this time of year and many people fear that what is now a shortage of numbers will develop into a situation where cattle will be virtually impossible to find as winter approaches.
I don't like to be negative, but there should always be a cautionary tale when things are booming and there is no immediate end in sight.
There are plenty of people left in the livestock and meat industries who are old enough to remember the 1970s. I was a young stock agent and was instructed by a client to find him a few store steers. I duly bought some nice lightweight Hereford steers for $300 to $350 a head, and he was so impressed that he gave me carte blanche to buy as many as I could. There is nothing more zealous than an agent with a client's blank cheque in his pocket so I found my client store steers everywhere. He was happy, and I was patting myself on the back for a job well done while waiting expectantly for the finished article to earn some commission.
This was, of course, just prior to the great beef crash. The poor client diligently fattened his store steers and for his investment that owed him roughly $350/hd he managed to return under $50/hd for the finished article. So many people were burned by the crashing prices that many never recovered.
I'm not suggesting that the current situation will follow that scenario, but history has a way of repeating itself. In the meantime, if you've got cattle to sell, enjoy it because it has been a long time coming.
