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National Cattle Market Bulletin

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NATIONAL CATTLE MARKET BULLETIN Cattle markets have been in the doldrums since November last year caused by export market uncertainty, unseasonally high supplies and hot, dry conditions in southern Australia. However, markets stabilised over the second half of February to remain well above last year's rates.

Despite the uncertainty caused by the Asia fallout market fundamentals this year remain positive for the Australian beef and cattle markets. US supplies are due to begin their cyclical decline in the second quarter, the Korean government is to commence buying at the same time, falls in supplies are also expected in New Zealand, Japan, Korea and Australia and the

exchange rate against the US dollar is more favourable than last year. With these powerful forces at work the Australian market is expected to be able to shrug off the problems caused by Asia except in the far north were the live cattle trade dominates the cattle markets.

The northern monsoon has generally been favourable though drought areas still remain, particularly in central Queensland. Northern NSW has also received useful summer falls while centraiysouthern NSW, SA and W A have suffered an abnormally hot, dry summer. Much of Victoria is dry due to the poor rains last spring.

Despite the Southern Oscillation Index (SOI) showing only a moderate rise in February to - 21. the average to above average summer rainfall across much of the eastern half of the continent is consistent with a declining influence from El Nino.

February again saw a high cattle tumoft with both New South Wales and Queensland slaughtering around 10% more cattle than was seen (on average) throughout the same months of last year.

Rapid nses in food costs and other economic problems stemming from the currency crisis have caused sharp cuts in beef exports to south east Asian countries, particularly our largest in Indonesia and the Philippines.

Export prices to Japan eased as the slowdown in demand, as seen in January, was again evident throughout February. It is nol unusual for a slowdown in demand during January/February, However, a tight supply situation has kept the wholesale market firm, despite weak demand from both the retail and foodservice sectors.

Prices for imported grinding beef In the US eased during February as demand in both the retail and foodservice sectors has been poor. This lacklustre demand, coupled with plentiful supplies from overseas (including Australia), resulted in prices falling slightly to 240Ac/kg, a drop of 6 Ac/kg.

The combination of Korea's financial and economic problems, aggressive US programs and higher stocks of imported product have resulted in few sales of Australian beef to Korea over the first two months of 1998. However, the Korean government is expected to commence purchases by late March with large monthly tenders required over the next seven months in

order to meet their 40% of the quota. The concessions granted to the USA by the Korean Government need to be extended to Australia if we are to again compete within the majority private SBS quota (60%of the quota).

The severe downturn in the live cattle trade, resulting from the Asian currency crisis, is now starting to ‘hit home’. Indonesia still remains our biggest concern. Easily our largest market (last year purchasing around 440,000 cattle) Indonesia have not purchased any cattle so far this year.

Contact: Peter Weeks (02) 6273 3688 Or 0418 628 713

To receive a full copy of the National Cattle M arket Bulletin please poll CCA fax on (02) 6273 2397 after 5.00 pm, Monday, 16 March.

P0 BoxE10 0.V.T ACT 2600 IMFF House 14-16 Brisbane Avc

Barton ACT 2600 PI: 06 273 3688 Fax: 06 273 2397

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