AUSTRALIA - The recent slide in the Australian dollar, dropping below 90US¢ briefly in the last week will have come as welcome news to the Australian red meat sector, according to analysts at Meat and Livestock Australia.
The Australian dollar started September at 93.4US¢, and then fell below 90US¢ on Monday – a fall of four per cent in just over a fortnight.
While the record volume of beef shipped in the past 12 months has been facilitated by historically high drought induced turnoff, and complemented by strong overseas demand in several markets, it has also been achieved with the Australian dollar trading well above 90US¢ for much of this time.
With global beef prices at near record highs throughout this period, some of the higher returns that could have been spread through the industry over this period had been eroded by the historically high Australian dollar.
Looking ahead, with cattle supplies expected to tighten towards 2015, and subsequent expectations for higher cattle prices, any further depreciation in the Australian dollar will help to maintain export competitiveness in overseas markets.
Indeed, MLA said that a continuation of the improvement in the global economy, centred upon the US, should not only put downward pressure on the Australian dollar, but also improve consumer sentiment and demand for red meat – a very positive scenario for the Australian producer.
TheMeatSite News Desk