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Meat & Livestock Australia - Cattle Projections_100809
 

Meat & Livestock Australia - Cattle Projections_100809

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Tim McRae - Economist, International Markets and Economic Services - in conjunction with Meat & Livestock Australia share a mid-year update on the Australian cattle industry projections.

Tim McRae - Economist, International Markets and Economic Services - in conjunction with Meat & Livestock Australia share a mid-year update on the Australian cattle industry projections.

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    Meat & Livestock Australia - Cattle Projections_100809 Meat & Livestock Australia - Cattle Projections_100809 Presentation Transcript

    • Australian cattle industry projections mid year update Tim McRae – Economist, International Markets and Economic Services 10th August 2009
    • A tumultuous past 12 months
      • The global economic and financial environment got very ugly, very quickly - recessions in US, Japan, Europe…and almost Australia
      • Massive currency fluctuations…the A$ went from 98.5US ¢ (July 08), to 61.2US ¢ (Oct 08) and then back to 84.5US¢ (Aug 09).
      • Demand for beef was altered in almost all markets, with consumers trading down purchases towards cheaper beef cuts and items…strong demand in fast food sector.
      • Very difficult beef trading conditions for Australian exporters, compounded by the plunge in hide and co-product returns.
      • High input costs subsided – grain, finance, fuel etc…
      • Floods in the north, drought in the south…but overall an improvement in conditions for the cattle industry.
    • Changes from January projections
      • Given these changes in the supply and demand landscape, changes from the January projections include…
      • Contraction in beef and veal exports for 2009 – back 4% to 950,000 tonnes swt
      • Cattle slaughter revised back 3%, or 250,000 head, as producers retain cattle
      • Average carcase weights revised 3kg lower, to 270kg/head
      • But medium/long term outlook remain relatively unaltered …
      • Australian herd expand toward 30 million head
      • Export demand to recover from 2010 onwards
      • Global beef demand/supply balance to tighten, lifting prices
    • Economic growth, 2009 a shocker…but things to improve
    • A$ plummets…but then bounces back
    • Returns* from co-products fall Potential return
    • But producers have seen a fall in costs
    • Australian saleyard cattle prices have improved in the past 3 months - EYCI
    • Lower costs boost farm cash incomes
    • Not a bad past 12 months…especially in northern Australia
    • Good past 3 months…but much more needed in southern Australia
    • Australian cattle herd to expand towards 30 million head
    • Record proportion of female cattle to underpin herd growth
    • Australian herd continues to move north
    • Australian cattle turnoff to recover in 2010
    • Australian beef and veal production to steadily rise
    • Australian cattle on feed numbers to slowly recover
    • Beef exports to expand from 2010 onwards
    • Australian beef exports to Japan to increase 3% in 2010
    • Export prices to Japan fail to benefit from lower A$ in first half of 2009
    • Grainfed exports and prices to Japan
    • Australian beef exports to Korea to face increase competition
    • US to increase Korea presence in 2010
    • Australian beef exports to US to recover 13% in 2010
    • US cattle herd declining, with production falling
    • Australian exports to Indonesia a highlight…
    • Restrained exports to Russia … 2008 was “out of the box”
    • Australian beef exports to China and Hong Kong to record levels
    • Australian beef exports to Middle East to consolidate growth
    • Australian beef consumption to decline
    • Australian live cattle export to register steady growth
    • Indonesia will continue to underpin cattle shipments
    • Beef and cattle industry overview
      • “ Exporters are currently grappling with tight livestock supplies, higher Australian dollar, weak co-product prices and low import prices. It probably won’t be until 2010 that exports will start to really gather steam. Over the medium to long term, Australia’s slowly expanding beef production is forecast to be met by rising global demand, especially as economic conditions improve in Australia’s major beef markets,”
      • Through to 2013:
      • Further herd growth, underpinned by stronger prices and profitability
      • Feedlot industry to steadily recover, reaching record numbers in late 2011
      • Beef and veal exports to exceed 1 million tonnes swt in 2010
      • Live cattle exports to resume growth in 2010, reaching 850,000 head
      • However much depends upon:
      • Speed of economic recovery – US, Japan, Korea, Australia
      • Value of the A$
      • Seasonal factors