January 29, 2015
In Focus: Queensland Beef Industry Outlook
Combined with strong industry fundamentals, Queensland saw significant rainfall during December 2014 and January 2015. In response, cattle prices have risen substantially as producers look to restock. However, despite this optimism, a number of challenges remain.
- Much of Queensland enjoyed significant rainfall in December 2014 and January 2015, leading to optimism that Queensland’s drought may be coming to an end (although the Bureau of Meteorology forecasts below average rainfall for many areas for the rest of the wet season). In response, cattle prices have risen substantially as Queensland producers look to restock. The Eastern Young Cattle Indicator (EYCI) is already up more than 20% on its December 2014 average, breaking through 400c/kg for the first time since early 2012 and now hovering just below 450c/kg.
- Rainfall in Queensland, combined with strong industry fundamentals, gives us cautious optimism towards Queensland’s beef industry. A decent finish to the wet season will further stoke restocker interest and spur the rebuilding of drought depleted Queensland herds, putting further upward pressure on cattle prices.
- However, a number of challenges remain. If further rainfall does not materialise, feed availability will fall and difficult conditions may return. Further, with more favourable weather returning to the United States and international grain prices pushed lower by falling oil prices, growth in exports to the United States may slow in the coming years.
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