Cattle industry growth on hold for now

Against a backdrop of buoyant global meat prices, the Australian cattle and beef industries should be gearing up for expansion, but a number of factors have put this on hold, according to the latest MLA industry projections.

MLA says the high Australian dollar, US beef's return to North Asian markets, ongoing drought and rapidly rising farm costs are now expected to keep the cattle herd and beef supply steady over the short term.

In launching the report yesterday, MLA's chief market analyst Peter Weeks said that while there is reason to be optimistic over the medium to longer term, the coming 12 months could remain challenging for large segments of the cattle and beef industries.

"Returns to medium to large northern cattle producers not in drought are expected to remain favourable, while many medium to small southern cattle producers suffering drought and rising costs will face further losses," Mr Weeks said.

"If the drought recedes, we could see a more general recovery in grazier and feedlot incomes, to attractive levels, driven initially by improved on-farm productivity and the elimination of drought related costs, and eventually also by beef price rises.