Beef exports increased14 % yoy
Global demand continues to grow
After record high beef prices last year, 2017–18 proved more challenging. Very dry conditions across most of the state in the latter half of the year forced producers to make difficult decisions to feed or sell stock. This resulted in increased supply and lower prices despite favourable export conditions. However, relative to previous droughts, both production and price were more resilient.
NSW produced 501,270 tonnes carcass weight of beef, up 11% on last year’s very low levels. As dry conditions set in, slaughter levels rose 8% year-on-year71.
With the very high cost of restocking following the 2013–14 drought fresh in producers’ memories, many opted to feed core breeding stock rather than sell.
Additionally, national herd rebuilding has been unable to gain significant momentum since the Millennium drought. Consequently, the increase in supply was more constrained than the levels seen in previous droughts. Demand from feedlots at saleyards partly offset weaker demand from re-stockers who, nevertheless, remained relatively active buyers by historical standards.
Prices fell, on average by 15% to 21% year-on-year, with the bigger falls registered in restocker categories. The benchmark Eastern Young Cattle Indicator fell 18%, averaging 541 cents per kilogram carcass weight over the year71. The bulk of the price falls occurred towards the end of the year, and while down on the record prices achieved in 2016–17, prices remain above long-term trends.
Reflecting strong export demand and tighter supply due to difficulties in finishing stock, heavy steer prices were more stable, especially relative to restocker categories. The NSW heavy steer average price was down 15% versus the restocker steer average price down 21%.
Beef exports increased 14% year-on-year in line with stronger global demand for protein. Beef exports to China surged 67%, becoming NSW’s third largest beef export market. All major markets except South Korea recorded year-on-year increases54.
Global demand for beef continues to grow, especially from China and other emerging economies. A weaker Australian dollar also improved NSW beef’s competitive position in international markets, despite increasing competition from the US and Brazil.