The Australian beef industry is expected to return to more normal market conditions this year, with more stable prices, according to the latest Rabobank Australian Beef Seasonal Outlook 2023 report. The industry has experienced an extraordinary period marked by record price levels and volatility, but Rabobank forecasts that prices will remain high, although in a narrower range. This stability will allow the supply chain to rebalance, creating a more sustainable market for everyone involved in the industry.
Cattle Prices to Remain Stable
The bank forecasts prices to remain at levels experienced in April through the remainder of the season, as cattle supplies build and producer demand declines. Rabobank’s senior animal protein analyst, Angus Gidley-Baird, said that 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. Rabobank projects that prices will be more ‘normal’ in 2023, rather than continuing the dramatic fluctuations seen over the past three years.
An Upside to Lower Prices
According to Gidley-Baird, the lower prices and resulting market stability will have “an upside,” 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 the industry is now working its way through some very expensive cattle in much softer consumer markets. This greater stability provides an ideal opportunity for cattle producers to plan for the future.
A Time to Plan and Prepare for the Future
Gidley-Baird said that this stability, along with the expectation that farm profits will still be strong, provides an ideal time to plan and prepare for the future. With a number of wetter seasons behind them, there is an increased likelihood of a dry season ahead, so now is the best time to prepare for future, less favorable years. This stability will allow the industry to move forward and create a more sustainable future for everyone in the supply chain.
Overall, the Rabobank Australian Beef Seasonal Outlook 2023 report predicts a more stable market ahead for the Australian beef industry, with prices remaining high, although in a narrower range. The stability will allow the supply chain to rebalance, creating a more sustainable market for everyone involved in the industry and providing an ideal opportunity for cattle producers to plan and prepare for the future.
Frequently Asked Questions
Who is Rabobank?Rabobank is a Dutch multinational banking and financial services company that specializes in providing services to the agricultural sector. It is one of the largest agricultural lenders in the world.
What is the Australian Beef Seasonal Outlook 2023?The Australian Beef Seasonal Outlook 2023 is a report published by Rabobank that provides an analysis of the Australian beef industry and market conditions for the upcoming year. It includes projections on prices, supply and demand, and other factors that may impact the industry.
What impact did the recent extraordinary period have on the Australian beef sector?The recent extraordinary period, marked by record price levels and volatility, had a significant impact on the Australian beef sector. It resulted in high cattle prices, making beef more expensive and less competitive in export markets. The market instability also made it difficult for supply chains to rebalance and plan for the future. However, the current market stability and narrower price range is expected to improve Australia’s competitive position in export markets and create a more sustainable market for everyone in the supply chain.
What does Rabobank project for cattle prices in 2023?Rabobank projects cattle prices to remain at levels experienced in April through the remainder of the season, with prices hovering in a relatively narrow band around current levels for 2023. This is expected to create a more stable price range and allow the supply chain to rebalance after the expensive cattle are cleared. However, the prices are still historically high and beef producer margins are expected to remain strong.