Resilience helps ride-out market bumps

Resilience helps ride-out market bumps

Beef
Cattle Council CEO Margo Andrae says when farm gate productivity is hindered, it restricts the ability for growth into new markets.

Cattle Council CEO Margo Andrae says when farm gate productivity is hindered, it restricts the ability for growth into new markets.

Aa

THE Eastern Young Cattle Indicator is a useful guide for getting an insight into Australian cattle prices, so when the EYCI recently fell to its lowest level...

Aa

THE Eastern Young Cattle Indicator is a useful guide for getting an insight into Australian cattle prices, so when the EYCI recently fell to its lowest level since 2015, it confirmed the stress our markets have been experiencing.

Worsening drought across a huge part of Australia's beef heartland has forced producers to destock, placing large numbers of cattle in the marketplace.

Reflecting the season, many of the cattle being sold are in light condition, and what limited demand exists for 'out of spec' types has been overwhelmed.

Indeed, Meat & Livestock Australia market analysis has shown the gap between the EYCI and average prices for poorer condition score cattle has stretched beyond 100c/kg cwt in recent weeks.

Thankfully, the supply-demand balance for feeder and prime cattle has held up better, which is a reminder of how far as we've come in terms of building more sophisticated supply systems.

We're better placed now to avoid the massive boom-bust price cycles triggered by previous droughts, and the extent to which processors, lot feeders and live exporters have provided demand in recent months has been a saving grace for producers. If not for this competition, prices would have dropped further.

Whether it is drought or the flooding rain like we've seen over summer, our market is never immune to the twists and turns in the season. Supply driven price reductions such as the recent dip, and now the price recovery following some meaningful rain in parts of New South Wales and Queensland, are testament to how the market is intrinsically linked to the weather.

Hopefully further rain reduces pressure to destock and helps stabilise the market. As we've seen in the past, when the drought does break, supply will tighten and farm-gate prices will rise. This will be welcomed by producers, but it will put pressure on the rest of the supply chain.

The EYCI recently fell to its lowest level since 2015, and in doing so confirmed the stress the markets have been experiencing.

The EYCI recently fell to its lowest level since 2015, and in doing so confirmed the stress the markets have been experiencing.

Increasingly, producers are aware that they are part of a modern supply chain in which they are linked closely with lot feeders, processors, live exporters and consumers.

A pillar of Cattle Council's Beef Industry Strategic Plan is to grow the productivity and profitability of the whole industry. That's why we work with other peak councils, including the Australian Meat Industry Council, Australian Lot Feeders' Association and Australian Livestock Exporters' Council, because a resilient supply chain is in everyone's interests.

Producers are the engine room of the industry and when farm gate productivity is hindered by factors such as drought, it restricts our ability for growth into new markets.

As the peak national voice for beef producers, Cattle Council knows we have a responsibility to work with other industry stakeholders to develop our markets, uphold the integrity and reputation of Australian beef and strengthen the resilience of the businesses and families who produce it.

That way, whatever the seasons throw at us, we're better placed to ride out the tough times and thrive when the seasonal and market conditions are right.

  • Margo Andrae is the Cattle Council of Australia CEO.
Aa

From the front page

Sponsored by