Danny Wilkie of OLM, Double B Beef’s cattle marketing team had some important words for those who attended the Annual General Meeting, held Friday week in Bingara.
He said “Forget interest rates, the rise of the Australian dollar is far more damaging for cattle producers. For every 2 cents the dollar rises against the $US the price for cow beef goes down 8 to 10 cents per kilo.”
The strength of our dollar also impacts on the amount of US product going into the Jap Ox market. The falling $US means that their product is far more competitively priced than ours, when our dollar is so strong. Australian producers are suffering an extreme competitive disadvantage in the current market, the Jap Ox market underpinning the health of the beef industry. It is a massive market worth millions of dollars to Australian cattle producers.
Danny also said that in the grain fed market, the US has a far greater capacity to absorb losses than we do. Their feedlots are scaling back due to the high cost of grain, but they only export 5% of their capacity. We export around 65% of our feedlot beef so a contraction in that market has a great effect on us all.
Danny reported that 8160 head of Double B Beef cattle were marketed through OLM in the 2006 – 2007 financial year.
“I think we are in for more volatile times ahead. Not all of the price movements will be down, as I believe there will be shortages of supply of livestock, particularly if the season turns around as it is giving every indication of doing,” Danny said.
Phil Mason stood down as President, having done his maximum of three years and Will Cannington was elected as the incoming President. Don Capel was elected as the Vice President.