Australian cattle prices rally as herd rebuilds

Thursday, 24 September 2020

By Rebecca Wright

Every month AHDB publishes a series of charts comparing British cattle prices to various global cattle prices.

In Australia cattle prices have rallied, standing as much as 50% above year earlier levels and reaching record breaking highs. Meanwhile in South America prices have been steady to slightly down. There is a variety of reasons why prices around the world may not follow the same trend.

Over the past few years there has been severe droughts in Australia which peaked in January 2020 when there were wide spread wildfires across the country, heavy rain falling shortly afterwards. During the drought many Australian farmers downsized their herds. With the rain, farmers took the opportunity to re-stock and re-build herds. This has meant a shortage of cattle available for kill in the short term.

In New Zealand cattle prices dropped in March as COVID-19 social distancing measures were brought in. These measures meant the supply of cattle was more than kill capacity. As the restrictions were lifted prices have returned to levels more typically seen in recent years. Prior to the early months of 2020 farmgate prices in New Zealand and Australia were at similar levels to each other.

In South America and the United States prices also dropped during the initial months of the COVID-19 pandemic. Although prices have now largely recorded some gains they still remain subdued. While these countries are large beef exporters, only a small percentage of production in the US and Brazil is exported. The vast majority of beef is consumed domestically. This means domestic trends can have a large impact on the price quotations in those countries, rather than the price changes simply being a direct reflection of the global market.

Rebecca Wright

Analyst - Red Meat

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