AUSTRALIA - By the time 2014 is over, a number of Australian red meat records will be reset, including beef production, lamb production, and respective exports – each to highs that are unlikely to be matched for many years to come, according to Meat and Livestock Australia.
Beef production was fuelled by the widespread drought across the heavily populated cattle regions, consequently inducing high slaughter rates – with the eastern states weekly kill regularly exceeding 170,000 head – significantly greater than the usual 130-140,000 head range.
MLA said that similarly, lamb production rose with the dry conditions spreading further south as the year progressed – the indicative eastern states kill nudging 400,000 head per week at times.
Offering considerable support for both beef and lamb prices was the hot and hungry global red meat market, with the US in particular demanding extremely high volumes of lean beef at record high prices. Similarly, lamb exports also surged, with greater volumes to all markets.
While the greater supply from Australia drove much of the increase, the progressive devaluation of the Australian dollar also assisted trade. Despite the fact global prices have been high, movement through the supply chain has been somewhat constrained, given the congestion at many abattoirs.
However, during 2014 the Eastern Young Cattle Indicator (EYCI) averaged 335¢/kg cwt, finishing the year with a head of steam, with EYCI eligible cattle at Roma and Tamworth closing the year in excess of 400¢/kg cwt.
The Eastern States Trade Lamb Indicator (ESTLI) averaged 521¢/kg cwt for the year, up 23 per cent year-on-year – staggering, considering how high slaughter was, and how weak restocker interest was at times.
While the production and export records set in 2014 will cast a long shadow, and are unlikely to be broken for many years to come, the expected strong international demand, combined with anticipated tighter supplies in 2015 should offer support for beef and lamb prices.
Once the drought breaks, the question becomes, will cattle, lamb and sheep prices follow suit?
TheMeatSite News Desk