The industry’s future will likely depend on weather and export market conditions
Melbourne, Australia (PRWEB) August 02, 2012
The past decade has been tumultuous for the Beef Cattle Farming industry with periods of drought adversely affecting the industry's performance. According to IBISWorld industry analyst Kiera Outlaw, “over the past five years, beef cattle prices have steadily declined”. At the same time, the lingering effects of drought conditions, which increased the cost of producing cattle, squeezed industry profit significantly. A return to favourable weather in late 2010 was the start of good fortunes for the industry, yet profit remained under pressure as farmers focused on rebuilding herds. Over the five years through 2012-13, industry revenue has decreased an annualised 0.1% to reach $7.66 billion. Industry revenue is expected to contract 2.8% in 2012-13. Cattle prices change in response to export market demand, and the supply and demand for cattle in the domestic market. Over the past five years, beef cattle farming has been strongly affected by volatile returns from beef exports. Luckily, all this comes off the back of a severe drought period in Australia, which has incited farmers to rebuild herds despite rebounds in prices.
Since the breaking of the drought in late 2010, conditions have started to improve for beef farmers as greater fodder volumes push cattle finishing weights higher. “The number of beef cattle slaughtered in 2012-13 is expected to increase only slightly since farmers continue to focus on rebuilding their herds”, Outlaw says. Over the next five years, the fortunes of the industry will likely depend on weather and export market conditions. Assuming a continued run in favourable weather conditions and stronger demand from overseas markets, industry revenue is expected to grow.
Australia's Beef Cattle Farming industry is estimated to have a low level of market share concentration. The industry is characterised by many small and medium-size operators. The top two companies in the industry are Australian Agricultural Company and Lake Woods Holdings. The consolidation of feedlot production has been one factor driving producer-processor integration, producing greater productivity and cost savings. Ultimately, the emergence of large, vertically integrated companies should help the industry gain a competitive edge in the international marketplace. The largest establishments in the industry are located in the northern regions of Australia, while southern Australian consists of smaller farms.
For more information, visit IBISWorld’s Beef Cattle Farming report in Australia industry page.
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IBISWorld industry Report Key Topics
Farms in this industry produce beef cattle or operate beef cattle feedlots.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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