AUSTRALIA'S cattle market remains unscathed by the economic uncertainty flowing from the Ukraine war and lower disposable incomes as consumers worldwide spend more on fuel.
World beef prices have hit record levels and the decline in consumer spending is pushing meat consumers to one of Australia's key beef exports - grinding beef in the United States.
All that adds up to negating downward pressure due to hit cattle prices on home soil.
So far, the war and economic decline has not offset the effect of tight cattle supply in key beef exporting nations in terms of affecting global prices.
International bovine meat quotations reached a new record high in February, as reported by the United Nations' Food and Agricultural Organisation.
It's meat price index jumped more than 1 per cent month-on-month and sits 15.3pc above the year-ago level.
The FAO reported that was driven by strong global import demand amidst tight supplies of slaughter-ready cattle in Brazil and high demand for herd rebuilding in Australia.
The 90CL (chemical lean) indicator - the benchmark price for frozen manufacturing beef into the US - also hit a new record this month and is currently up 20pc year-on-year.
A major part of the mix for Australian exporters is lean cow beef to the US for use in manufacturing ground beef for burgers.
Mecardo analyst Angus Brown said the Global Financial Crisis of 2006-2008 provided a template of sorts for what Australia's beef exporters could expect in times of economic uncertainty and the subsequent decline in consumer spending.
The move from higher-priced steaks to lower-priced burgers increases demand for ground beef, of which Australian lean cow beef is a major component, he said.
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Global beef markets are forecast to remain very tight through 2022, providing strength in prices, particularly when combined with growing demand as the pandemic is overcome.
United Kingdom livestock analyst Hannah Clarke, from the Agriculture and Horticulture Development Board, said lower production was expected out of America and New Zealand, and export restrictions remain on some Brazilian and Argentinian product, while demand from big world importer China was forecast to remain firm.
There are, however, headwinds being flagged.
Big agribusiness lender Rabobank has pointed to cost pressures in beef supply chains pushing retail prices to a level where consumers will have to walk away.
Labor, feed, freight and energy are some of the largest cost increases, Rabobank says, and some will be permanent and need to be accommodated within the supply chain.
While the retail beef price rise over the past two years has been phenomenal, it has been on the back of consumer demand pull, Rabobank senior analyst Angus Mr Gidley-Baird said.
In the last quarter of 2021, beef retail prices in the US were 23pc higher than the five-year average and in China they were 24pc above the five-year average, Rabobank data shows.
"But as we shift from demand pull to cost push from inflationary pressures, whether the consumer tolerance for paying more for beef will remain is the big unknown" he said.
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