Agribusiness analysts are optimistic about the future of the cattle industry pointing to price volatility as an opportunity and tipping a lift in cattle prices towards the end of the year.
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ANZ head of agribusiness Mark Bennett said complexity in the supply chain, and more volatility in pricing, are more opportunities for producers to diversify, reduce risk and take advantage of seasonal upswings.
"There have been significant changes in the past 20 years, and they're coming to a head now," he said.
"Beef isn't what it was even just five ago, when demand was driven by too few cattle on the ground, it's now the opposite.
"The high herd number and a gap in the market left by the US, is leading to higher demand for exports and continued upward pressure on domestic prices," he said.
ANZ's Australian Beef: The Carve Up report states that the EYCI currently trading about 25 per cent below trend, there was an expectation that strong export demand would put upward pressure on domestic saleyard and retail prices.
The report said the breakdown of division of profit after the farm-gate show the whole supply chain was absorbing the relatively stable beef prices being passed on to consumers.
"It shows that strong export prices are proving a useful offset for an industry seeking to maintain lower prices at the retail end," Mr Bennett said.
"Today's cattle industry might be more volatile, but there are big opportunities for the agile and responsive producer."
But, analysts also suggest that right now the market is sitting in a "state of balance".
Rabobank's Australian Beef Seasonal Outlook 2024 report says the current absence of any strong demand - along with a higher herd inventory, with no real liquidation or rebuilding urgency - means cattle prices are more exposed to changes in producer sentiment. And this, in turn, is highly dependent on seasonal conditions.
RaboResearch senior animal protein analyst Angus Gidley-Baird said while domestic consumption of beef was forecast to drop slightly, Australian beef exports in 2024 were expected to rise by 10pc off the back of increased production.
The Rabobank report said demand in key Asian markets, although soft, was expected to improve in 2024.
Mr Gidley-Baird said declining US exports to Asian markets would support increased Australian volumes to these destinations, but Australian exports would need to compete with increased volumes from South American suppliers.
"The US is also expected to be a strong importer of Australian beef in 2024," he said.
"Following an 84 per cent lift in exports in 2023, we are expecting a further increase in Australian volumes to the US in 2024."