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Drought conditions force record cattle turn-off
(Thursday, 10 April 2014 - ABC News)

Rain in recent weeks has seen cattle prices, up and down the Eastern seaboard, after falling in January.

Meat and Livestock Australia chief economist Tim McRae says the turn-off of stock over the past year has been the highest in decades.

He says it will mean cattle are in tight supply for a long time to come.

"The simple factor of drought, has seen huge supplies coming onto the market, we've had nearly ten million head turned-off, for slaughter or live export, in the last year, that is highest in three of four decades," he said.

"Now the Australian market just can't absorb that kind of cattle numbers, without having a price issue."

Mr McRae says prices have improved for lighter cattle over the past month or two, largely due to good rain in many areas, especially NSW, over the past month.

The Eastern Young Cattle Indicator has risen from below 280 cents a kilogram at the end of February to close to 350 this month.

However, he says the outlook for the market is a 'tough one' to forecast,

"But what we do know is, there has been a massive liquidation of cattle in the last 18 months.

"When you combine that liquidation with very poor branding percentages for the last two years and much higher death rates, we are possibly looking at two to three million less cattle coming into the system," he said.

"That will have a huge impact on the supply of cattle.

"The pool of cattle to draw slaughter cattle from, in coming years is going to be much tighter, add to that a strong demand in the live export industry, it should point to some resistance to prices, especially if dry conditions come again."



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