Australia’s beef sector is set for a return to “more normal” market conditions in the season ahead, after a recent extraordinary period marked by record prices levels and volatility, according to Rabobank’s Australian Beef Seasonal Outlook 2023.
But while prices are projected to track in a narrower range – at close to current levels – through the year, this is still “historically high’ and expectations are that beef producer margins will remains strong, the agribusiness banking specialist says.
The lower prices and resulting market stability will have “an upside”, according to report author Rabobank senior animal protein analyst Angus Gidley-Baird, with cheaper cattle improving Australia’s competitive position in export markets and less price volatility allowing supply chains to rebalance.
“While high cattle prices in recent times have been great for producers selling cattle, this legacy remains and we are now working our way through some very expensive cattle in much softer consumer markets,” he said.
“A more stable price range for 2023 will allow the supply chain to rebalance, once these expensive cattle are cleared. Cattle prices have returned to more average levels, making Australian beef competitive again and creating a more sustainable market for everyone in the supply chain.”
This price stability also provides an ideal opportunity for cattle producers to plan for the future. “This greater stability, along with the expectation that farm profits will still be strong, also provides an ideal time to plan and prepare for the future,” Mr Gidley-Baird said.
“And with a number of wetter seasons behind us, there is increased likelihood of a dry season ahead, so now is the best time to prepare for future, less favourable years.”