Australia Beef Crisis Hits as Drought Decimates Wheat

Record high grain prices have thrown Australia’s A$4 billion (US$3.5 billion) beef cattle industry into disarray, emptying feedlots, cutting cattle saleyard prices and triggering price rises for domestic and exported beef.

The world’s biggest beef exporter by value and the second-biggest exporter by volume, parts of Australia’s beef industry have begun to shut down after feed grain prices doubled since June because of the decimation of crops by drought.
“Supplies of quality beef onto the domestic market and to export markets are going to start reducing quite substantially,” said Malcolm Foster, president of the Australian Lotfeeders Association.

“It’s very bad. There wouldn’t be a feedlot making money now,” he said. Australia has 700 feedlots.

Cattle on feed had already begun to drop off and the industry, now urgently counting numbers around the country, was already in crisis, Foster said.

“You will certainly see shortages of quality beef … And because pasture conditions are impacted by drought, the cattle aren’t going to be anything very flash,” he said.

Beef prices would shoot up until consumers were no longer willing to pay, Foster said. “It’s already started,” he said.

Peter Weeks, chief market analyst at industry representative body Meat & Livestock Australia, sees price rises looming for Australia’s big export trade, to Japan and Korea in North Asia, and to the United States.

Planet Ark