Prices of competing proteins The prices at which alternative meats are traded

Prices of competing proteins the prices at which

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Prices of competing proteins The prices at which alternative meats are traded internationally will influence the demand for Australian feeder cattle. Rapidly increasing supplies of beef out of South America have been one development, but others include cyclical movements in pork and poultry supplies and prices. Events shaping these developments include changes to the European Union Common Agricultural Policy and meat exports, disease outbreaks and responses, and movements in international grain prices. It is likely that the price of beef out of South America, especially Brazil, will continue to rise as currencies rebound; even though overall global beef prices will move lower than the last couple of years when the US has been excluded from high priced Asian markets. The EU will continue in its recent shift to a net beef importing position of significant size. The prices of globally traded chicken and pork are not considered to be important influences in live cattle markets and, in any case, are not expected to move much lower.
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Value of the live export industry Page 39 of 64 Economic conditions in importing countries Strong economic growth in most countries fosters increasing demand for beef. Also, as incomes rise, demand increases for fresh as compared with frozen meats. The other side of the coin is the contraction of demand when economies falter. The Asian economic crisis of 1997/98 is evidence of this, when currency values in Indonesia and the Philippines fell, import demand collapsed. Asian economies have shown reasonable (Philippines, 4.8%) to strong (China, 8.0%) economic growth in recent years. The key to Australia’s prospects for live cattle exports will be Indonesia (see Figure 4, pg. 8). The recent change to Indonesian fuel price policy is reported to have caused some dislocation to the economy and growth has been slow. However, anecdotal reports of strong investment in feedlots, increased aid assistance, re-building following the tsunami and confidence at the regional level suggest a strengthening economy. Economic growth influences not only consumer demand but also exchange rates. The Indonesian rupiah has recovered from the lows of 1997/98 crisis, but continuing fluctuations are disconcerting to the cattle export trade out of Australia. Further recovery/appreciation of the currency will clearly be to the advantage of the trade. Further devaluation, although it would have a significant impact, is considered unlikely. 7.3.3 Influences shaping supply out of Australia Currency exchange rate The appreciation of the Australian dollar in recent years has made Australian cattle, as with live sheep, more expensive for importing countries. Obviously, any further appreciation of the currency will make cattle imports even less attractive.
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