Australian to boost beef export to meet rising U.S. demand
Australia is boosting its beef exports to meet the growing demand in the U.S. and to take advantage of the forecasted rise in beef prices.
Australia's beef exports to the U.S. declined in recent months because of high cost of transport and low margin of profit. The Meat and Livestock Australia said that Australian beef exports fell 40% in recent months compared with last year.
But the rising demand for beef in U.S. fast food restaurants are driving prices up as well as shooting up demands. The U.S. is Australia's second largest market for beef exports.
Steve Meyer of Paragon Economics expressed confidence that demand for Australian beef has improved with the developments in the U.S. Aside from higher volume, the current price levels of beef in the U.S. is also encouraging, he said.
He cited the global financial crisis the severely hit the U.S. economy which caused the decline in Australia's beef exports to its second biggest beef market.
Meyer said that at the height of the financial meltdown, many Americans do not have the money to spend, but those who have money, does not want to spend on anything unless "very necessary."
But the improving global economy is benefiting the beef industry, he said.
Len Steiner, of Steiner Consulting added that the price of beef is expected to further rise in August compared with current prices. But this is expected to slide again at the end of the year.
However, Steiner said beef prices are predicted to go up by 11 percent in 2012 compared with the 2010 level.
Rabobank analyst Wendy Voss added: "I think there's a lot of people quite excited about what's going on in the U.S. at the moment and will be putting more product into that market."