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Export ban hits cattle prices -

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Australia's domestic cattle market is feeling the effects of the ban on live exports to Indonesia.
Victorian and South Australian producers say they've seen a slump at cattle auctions since the halt
began more than three weeks ago.

ELIZABETH JACKSON: It's been more than three weeks since Australia froze live cattle exports to
Indonesia, and now the domestic market is paying the price.

Producers in Victoria and South Australia say uncertainty around the trade is battering market
confidence, with cattle prices falling at some auctions.

Jason Om went to a monthly cattle auction at Strathalbyn, south of Adelaide for Saturday AM.

(Sound of cattle)

JASON OM: At the cattle yards in Strathalbyn, 900 cattle are up for auction. It's the biggest sale
here since the halt on live exports.

The bidding is furious. All it takes is a twitch of the thumb or a quick slap towards the chest.

(Auctioneer shouts prices)

These cattle are destined for feedlots to be fattened up for slaughter or for domestic abattoirs.

Bob McGrath is here to sell.

BOB MCGRATH: That's some of my lot there and I've got another 20 cows and calf up there for sale as
well. Hopefully the prices are going to be good.

JASON OM: But he says the market is shaky.

BOB MCGRATH: I think it's reasonably well at the moment. A bit worried about the Indonesian caper.
Everybody's nervous, yeah.

JASON OM: Prices at this auction ended up slightly weaker and regulars say the turnout was smaller
than usual.

It's a slump reflected elsewhere in South Australia and Victoria according the Farmers Federation.

CHRIS HOCKING: It has come back. Feeder cattle I would probably say have dropped somewhere between
15 and 20 cents over the last two or three weeks.

JASON OM: Contract buyer and cattle producer Chris Hocking says it'll get worse if the impasse with
Indonesia drags on.

CHRIS HOCKING: Some of that is the result of the uncertainty with the Indonesian debacle. Some of
it to do with export prices and the other side of it the supermarkets are pulling their contract
prices back.

JASON OM: He says the cattle up north have nowhere to go and that can only mean one thing.

CHRIS HOCKING: It will cause a big drop in cattle prices. Those extra, I don't know how many it is,
it's millions that I think that will end up going there to Indonesia, those extra cattle that are
going to come onto our market and they've got to go somewhere.

JASON OM: There is some debate over whether that cattle will end up in the southern markets. How
realistic is that prospect?

CHRIS HOCKING: It depends what you call a southern market but I mean there's no meatworks north of
Townsville, they're virtually- if they're going to be killed they are going to be killed in
Townsville, down Townsville, Rockhampton, down through Ipswich, you know, Brisbane, and that meat
will end up where there is a demand for it.

JASON OM: The possibility of an oversupply worries Richard Reedy.

He has 200 cattle at Murray Bridge and wants to sell, but right now he's reluctant to go to market.

RICHARD REEDY: We just hope that the Australian Government can sort of the situation out as soon as
possible because it is, I feel very sorry for the people up in the north, they're really suffering
and we certainly don't hope to suffer down here because of what's occurring up there.

JASON OM: So what are you worries?

RICHARD REEDY: The worry basically is being able to return per head, because that is what
ultimately helps us pay our bills. So if the price goes down it puts our overdrafts under pressure.

JASON OM: That uncertainty is causing you told hold off, is that right?

RICHARD REEDY: That's right, yes, we're just basically feeing hay to a large number of about 40
cattle that are on feed or sell through here.

JASON OM: But one market observer is sceptical about a potential glut down south.

MAX PEAKE: I don't think they'll come here. They'll go to Queensland.

JASON OM: Max Peake has been watching livestock sales for nearly 70 years.

MAX PEAKE: Those cattle that are being held up in Darwin at the moment are cattle that are under
350 kilograms. Well they are not killable.

JASON OM: This week the Federal Government announced $33 million to assist the cattle industry.

But the package has done little to subdue the widespread anger in the Northern Territory and
Queensland.

ELIZABETH JACKSON: Jason Om with that report.