THE underlying drivers of the live export trade are stronger than ever.
That was the comment from Agricultural Connections Australia director and WA Beef Council executive member Steve Meerwald at the Better Beef conference held in Albany last week.
Mr Meerwald said it was an interesting time for the WA beef cattle market as live export and boxed beef exports were both robust.
"The WA herd is static at about two million head which is less than it was three or four years ago," he said.
"And despite the severe drought on the east coast the market price of boxed beef has held up extremely well, which is astounding.
"We only need to go back 12 months and in a time like that if we flooded the market with beef, like we are doing now, it would not have withstood it.
"The reason it has now is there is so much demand for the product."
Mr Meewald said the resilience of the live export market has underpinned the recent rally in the beef cattle market in WA.
As was revealed last week Indonesia released its quotas for the second quarter bringing Australia on track to hit the 700,000 head target for 2014.
Mr Meerwald said the challenge with an increase in those volumes was that the market could quickly become over supplied.
"We could find ourselves in the situation that there are too many cattle on feed in Indonesia," he said.
"That means that what the Indonesian Government wanted, which was a decrease in the wholesale price of beef, will happen.
"And when it does it will have implications right back through the supply chain to producers in WA.
"This is something we just need to be aware of."
Vietnam demand for Australian beef was also strong and was continuing to grow, despite the resurgence of the powerhouse, Indonesia.
Mr Meerwald said industry had believed that the Vietnamese market would fail when Indonesia came back.
"Vietnam was a market which was developed as a result of the failure of the Indonesia market, but it is still strong and still growing and they are continuing to take large volumes," he said.
Mr Meerwald said at the same time Indonesia was starting to pick up again, and new markets like Vietnam were growing, there was less competition coming from some of Australia's main competitors.
"The cattle herd in the US is at its lowest levels since pre-World War II and they are being further impacted by weather events," he said.
"Their ability to rebuild their herd numbers is less now than it has ever been."
"While there is an increase in demand from China, they are also living through an urbanisation government policy which is impacting on their production levels.
"Small landholders with three or four cows have never really been able to make money out of beef production, but now they are living with these policies encouraging them to move into cities, so their own production base is falling.
"The nations that we supply are now less able to compete with us in their own market, which has opened up opportunities for Australia."
Mr Meerwald said boxed beef demand was strong and all things were pointing to continued growth and the fundamentals of live export were better than ever.
"Now we just need to work out a way we can keep governments and politics out of it," he said.