Cattle prices to hang tough

Domestic cattle prices have fallen from record highs but a new report says they will remain higher than the five-year average this year.

Rabobank’s Australian 2018 Beef Cattle Seasonal Outlook report said the nation’s key export markets were expected to remain strong but prices would dip.

It said a combination of increased cattle supply, reduced producer demand and weaker global prices would lead to scaled back prices.

Report author, Rabobank senior animal proteins analyst Angus Gidley-Baird, said the price decline would offset the production boost but the outlook was still for a profitable 2018.

“After falling by 1.7 per cent to 7.16 million head in 2017, we expect cattle slaughter to rise slightly in 2018, with herd rebuilding over the previous two years in southern States now expected to start generating increased turn-off,” he said.

Australian production looks set to lift 3 per cent this year, thanks to high numbers on feed, a lower cow kill and heavier grass-fed cattle weights in better seasonal conditions.

“Japan, the US, South Korea and China will remain key markets,” Mr Gidley-Baird said.

The report tips 2018 domestic cattle prices to be at 15 per cent below the year before.