Heytesbury boss upbeat about beef

A major Australian cattle producer says that while the market could soften in the new year, there will still be much value left in the industry.

Heytesbury Cattle Co general manager Hugh Barnet told Countryman that unprecedented beef prices has fuelled speculation of a market correction but an Asian appetite for Australian beef would keep the market strong.

The Holmes à Court family-owned company exports about 40,000 Brahman cattle each year to Indonesia and Vietnam and other growing Asian markets, from its six stations spread across WA and the Northern Territory.

“The demand for Australian cattle continues to be solid across all markets,” Mr Barnet said.

“You can’t say that it is strong in the south or in the north in particular, because supply is tight right across the country, so it,s an Australian market and not just a northern market.”

Mr Barnet said the industry was growing in confidence on the back of an improved wet season in Queensland last year, limiting supply and underpinning the record prices.

“The people there deserved a good year because they’d had gone without one for a very long time,” he said.

“The optimism that started in Queensland over the last year had a rippling effect in the markets right through to Victoria.

“As a result the market is in uncharted territory and anything over $3/kg is a good price.”

But Mr Barnet warned producers to not become complacent in the good times.

“We keep our costs down as much as possible,” he said.

“It is very easy in the current environment to spend too much money, with everyone wanting to sell you something that will add extra cost to your business and don’t necessarily add to the business bottom line.”

Mr Barnet said producers with good production values and supply chains would enjoy retaining good market share against competing commodities.

“There is a trend worldwide for chicken and pork consumption going up more quickly than beef,” he said.

“Most people seem to understand that, however, the beef consumption is still increasing in many parts of Asia and especially in China.”

Mr Barnet said also said the drive by Indonesia to find cheaper sources of protein was putting pressure on Australian cattle prices in the short-term; however, the pressure would be limited by growing Asian demand.

“The impact of buffalo meat in Indonesia has been spoken about for more than 20 years and it’s now happening, it’s real and it will impact the market,” he said.

“However there is still enough demand left in Indonesia for them to take our cattle.

“The Indonesians are coming to grips that they actually operate in the global market and are now under pressure from other markets.

“When Vietnam came into that market, they had to actually rise to that standard.

“Vietnam put a lot of pressure on the Indonesians to be competitive and when China eventually comes on board that will add further pressure.

“The Indonesians have had a competitive advantage until now, but that is going to change.

“The import of buffalo could soften that demand, but there is still enough market there for us to have a good share.”