Global Beef Demand Hides Volatility Of Soaring Livestock Prices | Queensland Country Life
The global livestock shortage, at a time of increasing demand for beef, places Australian cattle farming in a very attractive position.
However, some of the phenomenal demand dynamics at play now may be masking the extreme volatility posed by the booming Australian livestock market.
This is how one of the country’s most experienced beef vendors, JBS Australia’s North Business Manager Brendan Tatt, sees it.
Mr Tatt gave a field perspective of how Aussie beef travels on the world stage during the presentation of the weight gain section of the Paddock to Palate contest at the Royal Queensland Show this week.
Presented by JBS, the competition is the richest in the country and is now moving to the carcass and taste quality judging phase.
Mr Tatt said COVID is still impacting a huge number of people around the world and many are very good customers of Australian beef.
“We have had the most difficult grain-fed beef negotiations with Japan since the GFC (global financial crisis),” he said.
“Believe me, they’re looking for options (given Australia’s high prices).
“The implications of our massive increase in livestock prices is something we need to take into account. “
Cattle prices in the United States and Brazil were currently 65% cheaper than in Australia, Mr Tatt said.
“There isn’t enough beef for everyone right now and demand in most markets is increasing,” he said.
“Governments invest money directly in their pockets. People have high discretionary incomes.
“Usually people spend on marbled beef at these times. Wagyu is in a super cycle.
“Not everyone can afford to pay $ 100 for a steak, but there is more than usual right now.”
At the same time, and for various reasons, the supply was insufficient and many Australian beef customers have no options.
“The United States is on fire nationally and is raising beef prices that we have never seen before and while it will likely continue for a while, it masks the situation a lot for us,” Mr Tatt said. .
What will happen when this demand decreases and the United States has mountains of beef to transfer to export markets, given the price disadvantage that Australia finds itself in?
“We need to be alert but not alarmed,” Mr Tatt said.
As the United States moved heavily into the Chinese market, offering strong competition for Australian beef, in other parts of the world things were developing that could well compensate for that, Mr Tatt said.
“We have just concluded what looks, on paper, like a big trade deal with the UK. It is way more than what many in the industry thought they could achieve,” he said.
“The details are yet to come, but if it starts at 40,000t, which has been published so far, that’s ten times the quota we have now without tariffs and that’s huge.”
As early as next year, Australian beef could capitalize.
“It will be a free market for HGP (hormone growth stimulant). China initially made the absence of HGP exciting for us,” Tatt said.
“If the UK goes into this measure, they have the ability to buy a lot of our meat that was going to China.”
Mr Tatt said there would undoubtedly be a lot of twists and turns in the beef export road ahead, but “at the end of the day we have a product that people want.”
“Besides toilet paper, it’s the most requested thing in the supermarket every day,” he said.
“It’s a really nice place for us, but it’s volatile.”
All the cattle in the Paddock to Palate weight gain competition, except Wagyus, were fed at JBS’s Beef City, west of Toowoomba, one of two fully integrated operations of Farm, Park of fattening, processing facility and transportation of the country’s livestock.
For nearly 50 years, the feedlot, with a capacity of 26,500 head, has supplied the adjoining processing plant.
JBS feedlot and farm manager Sean Sturgess said the plant processes 1,000 head a day, five days a week.
The feedlot has 50 employees, the plant 750 and the transport operation 16 drivers.
Overall, the 574 competition head fed at Beef City consumed 804,230 kilograms of feed to gain 114,060 kilograms of beef, Sturgess reported.
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The Story Global demand for beef masks the volatility of soaring livestock prices first appeared on Farm Online.