Australian cattle prices collapse in the north

Posted by AFN Staff Writers on 8th May 2013

Australian beef graziers yesterday held a crisis summit in Richmond in North-west Queensland to address ongoing low cattle prices. The low prices have been attributed to a “flooded market” because of poor seasonal conditions, a strong Australian dollar and the cumulative effect of the 2011 suspension of live cattle exports to Indonesia.

According to Meat and Livestock Australia (MLA), cattle prices in Queensland in the week ending 2 May 2013 averaged 305 cents per kg cwt, while the Eastern Young Cattle Index fell to 300.75 cents per kg cwt – the lowest levels since December 2009.

The price drop continued a recent trend. Australian beef industry news website, reported in April 2013 that average prices for live cattle arriving in Darwin had dropped to $1.60 per kg, down from offers six to eight weeks earlier of $1.75 per kg.

Sale yards and processors in Australia have seen a surge in cattle as graziers dispatch more cattle in the lead up to winter after a very dry summer season up north.

The compounding effects of the 2011 banof live cattle exports to Indonesia have also been a major contributing factor to falling cattle prices. Live cattle exports to Indonesia in 2012-13 were down 38 per cent from 220,621 in 2011-12 to 137,2715, according to data from the Australian Bureau of Statistics (ABS), presented in a report by meat industry body Meat and Livestock Australia (MLA).

The MLA reports that the beef surplus has seen a significant increase in beef shipments to China and the Middle East.

According to the MLA, both China and the Middle East “continue to take record volumes of Australian beef”. Australian Food News comments that the low prices and high volume could present an opportunity for other importing countries to trade with Australia.

Crisis meeting resolutions

Meanwhile, in an effort to ease pressure on the live export and domestic markets, the more than 400 graziers attending the Richmond crisis meeting proposed a series of “action resolutions”.

Among the resolutions passed at the meeting was a plan to ask the Australian Government to introduce a form a foreign aid to purchase 100,000 head of cattle from Northern Australia at farm gate floor price of $1.50 per kilogram to “reduce the risk of the Northern Australia beef industry collapsing”. Farmers also resolved to ask that the 350kg weight limit on live cattle be lifted.

The summit also called for the establishment of a body to negotiate with the Indonesian Ambassador to expand and further develop the live cattle market between Australia and Indonesia, and for farmers and industry to be compensated for the “uncompetitively high” value of the Australian dollar.

More than 25 resolutions were passed at the meeting, covering issues such of concern as transport costs and varying forms of government assistance needed by farmers for their business survival.