While Australia's farmers face bright prospects in the long term as global demand for food is project to go up by 75 per cent in 2050, they have to contend with short-term dip in prices.
An Australian Bureau of Agricultural Research Economics and Sciences (ABARES) outlook conference on Tuesday in Canberra warned cattle raisers to expect a 10 per cent decrease in animal prices in mid-2014.
The agency said the decline would actually start by July when cattle prices would go down by 7 per cent to 305c/kilogramme. In the next 12 months, price would again tumble down by 3 per cent to 295c/kg.
The 2013 forecast contrasts with the rosier outlook the previous year.
ABARES explained the lower prices to lesser local demand for restocker cattle and increased supply of slaughter cattle which would place downward pressure on prices for trade steers and heavy steers.
There would also be lower demand for higher-value chilled cuts accompanied by higher demand for cheaper frozen manufacturing meat in export markets.
Aussie cattle raisers would also feel the impact of the reduction by Indonesia of the live cattle import quota to 267,000 heads in 2013 from 283,000 in 2012 and 500,000 in 2011.
In addition, the Australian cattle exporters would face competition from Latin American beef and Indian buffalo meat exporters in the Southeast Asian markets, including the Philippines, Malaysia and Vietnam.
One bright sport, however, is demand from China is expected to grow by more than eightfold in 2013 which will make China as Australia's fourth-largest beef export market as imports grew to 50,000 tonnes from 6,000 tonnes 12 months ago.
Jean Yves Chow, a senior livestock analyst at Rabobank in Hong Kong, explained the surge in Chinese beef imports to China blocking Brazilian and U.S. beef imports because of the mad cow disease.
With the long-term increase in demand for food will come competition from different parts of the world, particularly Asia as the continent improves food production which would soften prices, said ABARES economist Jammie Penm.
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