Australia-The beef market.

AUSTRALIA-THE BEEF MARKET.

Basis comment - NSW Japan ox vs. EYCI

17/04/2009

• Cash Price – The NSW Japan ox indicator is driven by grass fed export beef demand and the supply of finished cattle. The price tends to be higher in spring when supply is tighter and export demand starts to reach its peak.

• Basis – While prices for NSW Japan ox have been depressed so far this year (due to weaker beef export prices to Japan), the basis has remained at similar levels to the five-year average. This can be largely attributed to softer young cattle prices, which has seen the EYCI at lower levels as well.

• Seasonality – Basis exhibits only weak seasonality, due to relatively steady supply throughout the year. Northern NSW producers supply finished cattle in autumn/winter, while southern NSW producers supply finished cattle in spring/summer.