High cattle prices are here to stay, experts forecast
The last 12 months has seen cattle prices soar to record highs, but will that continue? This is what industry experts expect.
ELEVATED cattle prices could be the “new normal”, after 12 months of record-high prices.
The Eastern Young Cattle Indicator began its climb towards record breaking-territory this time last year.
The EYCI broke the 730c/kg barrier same time last year, and sits at 861.75c/kg today, a lift of more than 130c/kg.
The latest ANZ agri commodity report forecasts that prices could remain at this elevated state for some time yet.
ANZ head of institutional food, beverage and agribusiness Ian Hanrahan said improved rainfall has triggered a flurry of restocking action as producers look to build numbers after years of drought, “and we anticipate this ongoing push to restock to continue well into 2021”.
“Even if prices came down 30 per cent from current record levels, that would still mean that
the benchmark EYCI was at around 620c/kg, a peak last seen in mid-2016 to mid-2017,” Mr Hanrahan said.
“At the end of the day, it’s still a margin business, and assuming there’s not another
drought, major export shock or other black swan event, every major group along the beef
supply chain will need to rethink their strategy going forward.”
The report flagged Australian beef as a premium product in major international markets, which coupled with a strengthening Australian dollar and tight domestic cattle supply, could contribute to elevated prices throughout this year.
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