Beef will continue bull run says MLA chief

23 Aug, 2015 02:00 AM
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STRONG global demand and a positive outlook for the WA beef industry should continue into the future, according to experts at the WAFarmers annual beef conference.

MLA international business manager Andrew McCallum said the robust beef industry globally had great potential for the WA beef sector.

He said MLA was forecasting that Australian supplies post the current high turn-off period would be constrained going forward, and that it would take time for the herd to build back up nationally.

MLA said the industry would be even more export focused in the future and that the sector needed to keep a watch on what the US was doing in terms of prices, as it would be a good indicator for the Australian market.

"There is tremendous growth in our export volumes to the United States on a fiscal year basis," he said.

"If there is a fundamental change in US dynamics, down the track that will impact us.

"For demand and signals going forward, look to US beef production as when they rebuild their herd, it will be a good indication for our prices as well as competition from US beef in markets such as Japan and South Korea."

Mr McCallum told producers and industry representatives at the forum not to forget the Asian markets.

"Asia is very important for WA as 38 per cent of WA's beef exports are going to the broader China, South East Asia area," he said.

"WA is well positioned to service those markets and WA producers are in the right spot to capitalise on the envisaged growth potential - driven by both income and population growth.

"It is very encouraging for the sector going forward.

"As an example, Vietnam hasn't been on the radar for a while, but it is a very important and dynamic economy.

"MLA has been working in Vietnam via the placement of a live export resource in the market to help assist the growing live trade.

"And boxed beef exports are expected to follow the upward trend."

Mr McCallum said as export markets were demanding more of Australian product, aided by a lower Australian dollar, cattle prices were also trending upwards.

"Steer prices are up 32 per cent," he said.

"Everything short term is very much on the upside as these export markets demand a lot more product.

"Trade steer prices are the highest they have been in 35 years, so that's very encouraging.

"This time 12 months ago, we probably didn't imagine the prices we are getting, so it's very positive for the sector."

But Mr McCallum said the domestic market was under some pressure.

"The Australian market is being impacted by the huge export of product," he said.

"As a consequence per capita consumption here may drop to about 26kg which is the lowest it has been.

"It's not that Australian consumers are turning away from beef, it's just that the export market is attracting more product to overseas destinations than leaving it here for domestic consumption.

"Australia remains our largest volume market and is especially important for producers who turn off younger cattle.

"But we need to keep an eye on this trend."

Other speakers on the day included Harvey Beef general manager Wayne Shaw, Australian Cattle Veterinarians Association president Dr Enoch Bergman, MLA director Dr Peter Trefort, Lawsons WA regional manager Bevan Ravenhill, Australian Reliance managing principal Peter Burtenshaw and RSM Bird Cameron manager Simon Brown.

WAFarmers president Dale Park said the forum gave producers some food for thought.

"The take-home message for me was that we have to produce more," he said.

"But we have to keep an eye on our costs, and know exactly how much it does cost, per kilo, how many kilos per hectare your growing, and such.

"There is a great future ahead but we need to be producing more beef.

"It was a good day with more than 25 producers, as well as representatives from all the stock firms and the banks attending the event.

"I think those who were there got a lot out of the day."

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