THE high Australian dollar is hammering beef exports.
With the dollar trading at about US88c, export beef prices to Australia's key markets, Japan and the US, continued to slide last week.
Meat and Livestock Australia's national saleyard indicator for Japanese ox fell another 12c/kg to 295c/kg carcass weight, while the US cow indicator fell 3c/kg to 248c/kg carcass.
MLA senior market analyst Peter Weeks said the rise in the dollar was another headache for exporters already hit by poor demand for beef in Japan.
Because Australia exports 55 per cent of its beef output, a downturn in the export markets puts increasing pressure on the supply and price of domestic market.
This time last year the Japanese ox indicator was at a peak of 359c/kg and the US cow indicator at 148c/kg.
However, Mr Weeks said it wasn't a fair comparison, as the markets were in turmoil last year due to a falling dollar and global financial crisis.
He said the Australian beef markets were also being affected by poor seasonal conditions in Queensland, which had forced more cattle on to the market than normal for this time of the year.
Mr Weeks said Japan was the real concern for exporters, with demand down 15 per cent.
When added to the strength of Australian dollar it reduced the total value of local product to Japan by 30 per cent this year.
Japanese traditionally accounts for 40 per cent of Australia's beef exports.
Mr Weeks said he couldn't see any immediate turnaround.
"I just wish some of those pundits who were predicting a dollar falling to 80c were right," he said.
He said the Japanese were tending eat much more at home, particularly chicken and pork meals, rather than at restaurants which had been the major outlet for Australian beef.
In the US, Australian manufacturing beef was being forced to compete against an over-supply of pork.
Mr Weeks said the impact of the poor export situation meant that many Queensland processors were cutting their shifts.
Southern export processors were also facing pressure to reduce shifts, although unlike in the north, this was mostly due to a downturn in cattle availability.
Mr Weeks said more and more export product was being re-directed onto the domestic market and feedlots were trying to turn cattle off at lighter weights rather than feed for the export markets.
But despite the gloomy export situation, restockers at southern store cattle sales continue to buy with confidence.
At Wodonga last week, restockers with plentiful supplies of grass were prepared to pay 200c/kg for 300kg weaner Angus steers.
There was similar demand at Casterton, where 12-month-old 330kg Barwidgee-blood Angus steers sold for $674, or slightly more than $2/kg.
