Over the last fortnight, the Australian cattle market has witnessed its first slowdown for a year, however the market is still at historic highs.
Over the last twelve months, the weak Australian dollar, the BSE-free status and strong US and Japanese demand propelled the market forward by over 50% and beef prices hit new highs in June.
According to the industry-funded Meat and Livestock Australia (MLA) however, the occurrence of BSE in Japan has caused demand for beef to fall by 20% in both Japan and the US, buffeting Australian export prices. Export orders are being cancelled and shipments returned.
Furthermore, Peter Weekes, MLA manager of market information and analysis, explained to the Financial Times that because US and Japanese importers will wait for prices to reach new lows before bidding for exports, the market is expected to see further weakness.
The cattle industry remains buoyant however, largely due to the weakness of the Australian dollar, which is now worth about US$0.5, down from US$0.67 two years ago and US$0.8 four years ago.