Prices beefed up at Leongatha

PRICES for cattle are continuing to rise at the local selling centre.
Victorian Livestock Exchange (VLE) Leongatha is known as being a bullock market, due to the fact growers in South Gippsland consistently produce a high volume of high quality cattle.
VLE chief executive officer Wayne Osborne said the current upwards trend in pricing at Leongatha was a reflection of that quality and volume.
Another market leading aspect of VLE is the number of buyers that attend sales.
“We have 21 major processors that compete for cattle at our markets. This strong competition is another reason why there is a price advantage at VLE Leongatha,” he said.
More generally, there are a number of factors that have driven an increase in beef prices.
“The first is a change in consumer taste in the United States. Previously, the bulk of beef consumed in the US was grain fattened,” Mr Osborne said.
“Consumers are now showing a preference towards pasture fattened beef and they want to get that beef from countries with low incidence of disease.
“Australia and South Gippsland can provide that.”
Continued demand out of China is also driving Australia’s beef prices.
“The Chinese are also changing the way they consume beef. They are now after high quality beef, in large volumes,” Mr Osborne said.
The reduction of the Australian dollar is another factor raising local cattle prices.
Mr Osborne said an improved relationship with Indonesia has also impacted on beef prices.
“When live export was banned, a lot of cattle flooded eastern seaboard markets,” he said.
“Processors had more cattle than they knew what to do with, which depressed the price and eventually filtered down the east coast to the local market.”
Since then, the relationship has been improved and the impacts of the oversupply are lessening.
Mr Osborne said the drought in Queensland has reduced herd numbers and the local market is now starting to see the effects of the supply shortage.
“Historically from around September, we see a natural lull in cattle prices. This year’s shortage of supply has meant we haven’t seen that natural dip occur,” he said.
“Processors are paying for the cattle they can get.”
Mr Osborne said some producers were getting nervous about how high prices have reached this year, but he said their worries were unfounded.
“We don’t agree with that position and doesn’t match up with the message we are getting from buyers, or the demand from the international market,” he said.
“Due to international demands we think the beef industry has entered a new plateau of pricing. We are not anticipating the crash that some producers may be expecting.”
It is good times for beef farmers, however Mr Osborne said when the values of animals increase, farmers need to be conscious of on farm security.
“We have spent around $50,000 on video surveillance in the yards for that reason, and they have already proven useful,” he said.

On the up: Victorian Livestock Exchange chief executive officer Wayne Osborne said prices at VLE Leongatha have continued to remain higher than other Victorian markets.

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Posted by Sarah Vella on Sep 29 2015. Filed under Rural News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry