AFTER forecasting a significant uplift in cattle prices three months ago ABARES has wound back its forecast, due largely to ongoing COVID-19 impacts on global demand.

In its last Agricultural Commodities quarterly outlook report issued on June 16 ABARES predicted the average saleyard price of cattle would lift by four percent to 556c/kg, compared to an average of 518c in 2019-20.

However in its new quarterly outlook issued this morning, the forecast has been pulled back to an average price in 2020-21 of 513c/kg.

The main factors that have changed in the past three months have been a continued deepening of the global COVID-19 pandemic, and its associated impacts on demand for beef in key export markets, and a more favourable production outlook, boosted by the Bureau’s recently released positive spring rainfall forecast.

ABARES’ September quarter outlook says the national herd is yet to enter a restocking phase, based on data to June, despite improvements in pasture availability.

“After two years of drought many farmers are likely to be weighing the desire to rebuild their herds against the need to manage cash flow and debt,” the report states.

“The COVID-19 pandemic has increased uncertainty in global beef markets, making farmers less confident that prices will remain favourable in the medium term

“The high prices offered by processors for cows in late 2019-20 provided an incentive to offload less productive breeding stock.”

The report adds that global beef supply expected to increase in 2021, largely because of strong exports from US and Brazil.

To read the full report click here