Australia and New Zealand Beef—Looking Beyond the Price Peak

Rabobank believes that Australian and New Zealand cattle farmgate prices are going to decline as we move towards 2020, as domestic production recovers and record global animal protein production increases competition in offshore markets. Despite some of these developments posing challenges, they will, on balance, result in a higher average farmgate price in both countries out to 2020, in comparison to historical averages.

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Report Summary

Australian and New Zealand cattle are some of the most expensive in the world

Beef producers in both Australia and New Zealand are currently receiving record or near-record prices, which is likely to stay that way for the remainder of 2016. However, current pricing is not sustainable in the long term. 

Farmgate prices to ease, but settle at a new historically high level

Looking to 2020, Rabobank forecasts farmgate prices to gradually fall from current highs—but this fall is likely to be less severe than we have seen previously. In our latest Agriculture in Focus report Australian and New Zealand Beef Industry: Looking beyond the Price Peak, Rabobank identifies six key developments that will influence cattle and beef prices in the coming years. From lower domestic production to record global beef production, and from global beef trade becoming more complex to currency impacts—there is a mixture of both opportunities and challenges for the Australian and New Zealand beef industries.

Greater collaboration and integration of the entire supply chain is critical

The six factors mentioned in our report will have a measurable impact on the profitability of both the Australian and New Zealand beef industries, but are—for the most part—outside of the direct influence of individuals in the AU and NZ beef industry. So greater collaboration along the supply chain is needed to reduce the exposure to price fluctuations.

Where to go from here