The first weekly assessment and market analysis on Australian frozen boxed beef from agriculture commodities price reporting agency Argus says exports have been under pressure as an overhang in supply from the United States herd liquidation limits Asian buying.
That, however, is balanced against the expectation of lower future supply from the US as it rebuilds its herd now that the drought appears to be over.
Argus assessed the Australian frozen boxed beef 85CL (chemical lean) price at A$6.59 per kilogram on December 8, while the 65CL product was assessed at A$3.68/kg.
The company, which is also behind the Australian Northern Feeder Cattle price coverage, has began weekly pricing for Australian frozen boxed beef in a bid to bring price transparency to what it says are very opaque export markets.
Both the price assessments were launched in consultation with industry, farmers, financiers and traders, according to Argus agriculture market reporter Jessica Clarke.
Along with pricing assessments, Argus will offer news and analysis on global markets in this space under a subscription service in what is an Australian first.
"With elevated price volatility comes the requirement for trusted benchmarks to manage growing risk, protect margins, monitor price spreads and track opportunities," Ms Clarke said.
"The recent government scrutiny of livestock and grocery prices has increased interest through the Treasury competition review and the senate enquiry into supermarket prices."
The first report backs widespread industry commentary about Australia's strong position to fill the void from falling beef cattle herd numbers, and consequently lower beef production, in the US.
However, Argus says Australian traders have reported the effects are yet to be felt in the market.
It says East Coast Australian boxed beef prices have decreased marginally in recent weeks as transaction volumes decline on the back of lower Australian slaughter numbers heading into the Christmas holiday period.
"Many processors in southern Queensland are closing for up to a month for the Christmas maintenance period, keeping tradeable stock to a minimum for the short term," the report said.
"Traders are currently working through older stock, trying to empty storages before fresh stocks reach cold rooms in the new year."
The report said demand from global markets remained slow as Asian customers worked through domestic stocks.
Traders are optimistic that demand from Japan will increase after February, as the country's imports from the US start to drop.
Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
