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Increased competition pressuring cattle prices is likely to arise out of a growing US herd, according to ANZ Head of Agribusiness Insights Michael Whitehead, although strong prices in the sector are expected to continue as global demand expands.
Speaking on video on the release of the latest ANZ Agri InFocus report, Whitehead said even with this winter’s poor seasonal conditions in key beef producing regions, prices have remained solid.
“At this time of year cattle producers really see the price hanging in the balance,” he said. “[There was a] decline over the large part of this year, but as the rains came to Queensland and people restocked… prices started to head up again.”
" At this time of year cattle producers really see the price hanging in the balance."
Whitehead said as the US herd continues to grow it is providing increased competition.
“Competition in the Japanese market, competition in the Korean market and importantly competition in the American market where so many of [Australia’s] exports go as well,” he said.
The latest ANZ Agri InFocus commodity report released predicts the upward trend of beef prices – fuelled by global demand and competition from key importers – will remain for the longer-term.
The report suggests current price averages reflect a new normal driven by demand from international markets, particularly China. It highlights the stark shift in cattle prices in the second half of this decade, with prices from 2015-17 averaging around 64 per cent higher compared with 2010-14.
bluenotes also heard from ANZ Head of Agribusiness Mark Bennett and Associate Director of Agri Insights Madeline Swan on the outlook for wheat, lamb and wool, among other commodities. Watch the video above to find out more.
Simone Stella is a bluenotes contributor
A full version of the ANZ Agri InFocus report can be downloaded from ANZ Business Hub.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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VIDEO: taking stock on cattle prices
2017-11-20
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