The AAco has acquired 4JS Waygu stud herd for just over $1 million, AAco CEO Stephen Toms announced today.
AAco says contributing factors to the purchase and positive outlook for beef include:
• Continuing high beef prices, the weakening Aussie dollar and falls in oil prices and interest rates have boosted market conditions for cattle.
• Global beef shortages continue.
Mr Toms says the purchase includes the 'the well respected' “4JS” herd, increasing AAco's Wagyu full blood and purebred production capacity by 50pc.
The 850 head herd, which is currently based in North Queensland, will be re-located to AAco’s Surat property, Wylarah, where the primary focus is Wagyu.
"The 4JS herd has consistently fetched prices at the top end of sales in the Wagyu market and will further strengthen AAco’s strong presence in this segment of the beef market," he says.
"AAco has a 30pc market share of Australian Wagyu sold.
"AAco’s major Wagyu brands of Master Kobe, Kobe Cuisine, Darling Downs Wagyu and the joint marketing programme in the USA under the Greg Norman Signature Wagyu label will benefit from this initiative.
"The majority of Wagyu produced in Australia is for export and this acquisition will further strengthen AAco’s presence in the lucrative higher quality markets of Hong Kong, Korea, Indonesia, USA, the Middle East and the evolving opportunities in Europe."
The 4JS herd consists of a mix of pureblood and full blood Wagyu cows and calves, replacement heifers, steers and full blood bulls.
He also says that over the past month market conditions for cattle have continued to improve, strengthening the outlook for the group for next season.
Early showers on the drought-affected Barkly region and rainfalls in central Queensland have raised the probability of good seasonal rains returning to AAco’s stations across the north.
Recent rainfalls across central Queensland too,have encouraged graziers to restock to make good use of feed pools.
The three-month outlook shows an even chance of seasonal rains
on AAco’s northern stations and an even better outlook for those in South East Queensland.
Mr Toms says beef prices remain at 18 month highs of 360c/kg (EYCI) while export receipts and competitiveness have benefited from the steep decline in the Australian dollar/US dollar exchange rate from US98c to around US80c since July.
“The decline will boost Australian dollar receipts, particularly on sales into the USA over the next 12 months,” he says.
“Upward pressure on beef prices is expected to be sustained by
the continued shortfall in supply globally with breeding herds in China, Russia and the USA either in decline or flat and evidence that the growth in Brazilian beef exports has peaked.”
Cost pressures experienced in the first half of the year also have eased on a number of levels, such as:
• Interest rates have peaked in recent weeks with further easing anticipated.
• Oil prices have also declined overall, which may be reflected in lower diesel prices and a reduction in station operating costs, including transport, however there is little certainty as to how long this may last.
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