Falling cattle prices have forced a $43 million write-down in the value of the Australian Agricultural Company herd.

In a statement to the Australian Stock Exchange released late this orning, Australia’s largest cattle producer said it expects to report a loss of between $58m to $72m for the three-month period to March 31, which would represent a $60m to $74m reduction on its result for the corresponding period last year.

AA Co has blamed the result on the impact of the 2011 suspension of live cattle exports and below average seasonal conditions on domestic cattle prices in Australia.

The company’s full announcement to the Australian Stock Exchange released late this morning reads as follows:

The Australian Agricultural Co today announced the company’s profit for the three months to 31 March 2013 would be adversely impacted by a non-cash, market-price related, accounting standards-driven write-down of the value of its herd expected to be $(43) million.

Under Australian accounting standard AASB141 Agriculture, AACo’s herd is valued on a mark-to-market basis using local and regional Australian prices.

Domestic prices have been significantly depressed due to the Federal Government’s 2011 suspension of live cattle exports and below average seasonal conditions in northern Australia.

The majority of cattle marked down in value by the accounting standards are long life-cycle breeding cows and young grower cattle. The majority are not intended for immediate or near-term sale.

The company expects to report negative earnings before interest, tax, depreciation and amortisation (EBITDA) of between $(58) million and $(72) million for the three-month period, a $60 to $74 million reduction on the same three-month period in 2012.

Excluding the non-cash, market-price related herd valuation write-down, AACo’s EBITDA is expected to be in a negative range of $(15) million to $(29) million.

As advised on 16 April 2013, the northern wet season (November to March) has seen well below average rainfall.

Seasonal conditions have brought to the market larger numbers of finished and unfinished cattle, affecting both cattle valuations and prices achieved for domestic sales.

AACo intends to release its financial results for the period January 1, 2013 to March 31, 2013, in mid-May. As previously announced, AACo has moved to a new financial year-end reporting date of 31 March.

As recently as December last year, AA Co chief executive David Farley was forecasting a 9pc rise in cattle prices this year, as a reason for holding cattle back for sale from the latter stages of 2012 as conditions started to dry off.