$A now our best friend

It will come as no surprise to anybody that the $A has finally succumbed to market pressures and is spiralling down towards the US90 cents mark.

It is probably a bit simplistic to say that overseas demand rises incrementally as the $A value diminishes, but many economists and lay economists assure me that happens as surely as night follows day.

For the financial year ending June, 2013, Australian processors exported more than 1 million tonnes of beef - quite an impressive total.

According to these exporters, dollar returns have been tight and profits have become a faint memory - so, in turn, producers have had their belts tightened for them by buyers who have had restricted budgets to work with.

Now, we all know that meat companies and their buyers are as notorious with the "going-broke" line, as cockies are for whingeing about any perceived hardship. Sometimes it is quite entertaining to watch the battle between poverty-stricken buyers and hard-done-by vendors as each tries to prise a few more dollars or screw the other down.

Despite these concerns, there appear to be signs that exporters' purse strings are starting to loosen.

I had the pleasure of covering the Mount Gambier cattle sale for the past couple of weeks, where there was a strong price surge. Vendors of cows were the most obvious beneficiaries, and $1.30 a kilogram to $1.45/kg for the heavyweights was evidence that supply is starting to recede, and that the more-attractive exchange rate has translated into buyers' ability to pay higher prices in the saleyard. This trend was reflected at most Victorian and New South Wales sale centres.

The one real positive for the beef industry has surprisingly emanated from a place that is not renowned for good news for agriculture - Canberra.

It appears that finally we have a government and an opposition that both realise the importance of the live cattle trade with Indonesia, and are at least endeavouring to negotiate a way to return to pre-ban export numbers out of northern Australia.

Cattle producers will have to be patient, because diplomacy grinds slowly to a resolution.

For sheep producers the same basics apply. Lamb has had an export purple patch over the past few years and this looks set to continue, because global demand for sheepmeat is at historic highs.

Wool looks to be a winner into the near future, and the first stirrings of interest for quite a while from our biggest buyer, China, in lambskins and sheepskins, have met a combination of short supply and more favourable trading conditions conspiring to push-up prices.

*Full report in Stock Journal, July 11 issue, 2013.