ONGOING dry conditions across much of Australia have seen beef prices come back slightly in recent weeks.
Meat & Livestock Australia market information manager Ben Thomas said a lot rested on good rainfall in coming weeks.
“The thing everyone is keeping an eye on is the three-month outlook, which is fairly positive for southern Australia,” he said. “Everyone is keeping their fingers crossed the outlook is correct.”
Mr Thomas said beef prices have crept lower since the end of March.
“One of the reasons is the continuing dry conditions and low feed availability across large parts of Australia,” he said. “The other reason is the Australian dollar has crept higher to US 76 cents, while at the start of the year it was US70c.”
But the market can respond quickly to good rain.
“On Monday, the Eastern Young Cattle Indicator rose 6c a kilogram to 551.75c/kg after good rainfall across NSW,” he said. “Across some parts of NSW and in isolated areas in Vic up to 50 millimetres fell.”
The cattle market is booming in WA, where there has been strong early rainfall and excellent demand from live exporters, processors and restockers.
“The Western Young Cattle Indicator is 611c/kg – well above the eastern states,” Mr Thomas said. “The state had a very good start to the year, particularly in terms of feed availability, and it’s really supporting the market.”
Rabobank animal proteins senior analyst Angus Gidley-Baird said there were positive signals for the Australian lamb market. The market was trending upwards, which was typical of this time of year when supplies usually start to tighten.
“We’re seeing prices close to $6/kg, at the same time as large volumes,” he said. “It’s indicating there’s good, strong demand out there for Australian lamb.”
Overseas demand was helping boost the market.
“The United States is showing a lot of promise at the moment, with good volumes going to the US,” he said. “The US is one of our best value markets on a per kilogram basis.”
Mr Gidley-Baird said New Zealand would be a market to watch. Forecasts suggest lamb slaughter in NZ will contract by about 500,000 head in the coming months.
“It’s always helpful to watch them as another major lamb exporter,” he said. “If we see lower supplies from that market, it should help support prices here.”