AT the Nebo sale last week, Meat and Livestock Australia delivered its prognosis on the outlook for beef during the next decade.
Independent Melbourne economist Geoffrey Bills told the gathering of cattlemen the future is hard to predict; however, intelligent analysis could limit the uncertainties.
Mr Bills explained analysing trends over the previous 20 to 30 years helped to place the current situation in some sort of perspective and it was possible to pinpoint beef producers' place in the cycle. He also focused on the global financial crisis.
The International Monetary Fund puts world economic growth in 2009 at minus 1.1 percent, but forecasts it will be back in positive territory in 2010 with growth reaching 3.1pc.
However, the United States and the European Union are in more trouble than other countries, and they would take longer to recover.
So as the US is one of our major beef markets, that will mean prices for beef won't recover as quickly as the world economy.
But historically, commodity prices are now at their average value for the past 15 years and strong Asian growth will drive them higher in years to come.
MLA red meat market analyst Tim McRae said the world economic crisis had hit the meat industry hard - importers had held off buying and drawn down their stocks to minimise their exposure.
A lot of importers had been caught with high-priced beef in a falling price market and some, particularly in Korea, had gone bankrupt.
Russia, the world's largest meat importer, stopped buying for a period and now its imports are still slow, as are Korea's.
Helping to lower the value of cattle was a dramatic fall in the price of by-products, particularly hides which had fallen by 80pc, and it was reported in South America they were being buried because there was no market for them.
One of the contributing factors to the hide price collapse was the slowdown in world car production.
Demand for beef by consumers worldwide also dropped.
People stopped eating out or changed from restaurants to fast food. More people were eating at home and buying cheaper cuts, mince and sausages, or had changed to chicken and pork.
Mr McRae said in Japan, stocks of beef are clearing, but due to the high value of the Australian dollar, the exporters are taking a hiding and prices are back to the 2003 level.
In the US, demand had dropped and that had been made worse by additional supplies of manufacturing beef hitting the domestic market.
As to minimise an oversupply of dairy products, the US dairy industry had implemented a dairy herd retirement plan and was selling cows.
Russia would become a bigger market as its beef industry wouldn't recover and Australia has to cut the red tape and promote itself to gain market share.
Russia imports more than a million tonnes of beef and most Russians don't know about 70,000t of it comes from Australia.
Korean imports are beginning to increase, but low-priced US product is putting pressure on Aussie beef.
In both Korea and Japan, consumption of beef still has a long way to go to get back to pre-US-BSE levels.
Mr McRae said Indonesia was taking record numbers of live cattle and packaged product.
The island nation is currently taking 950,000t of packaged product and the steady growth will see that pass the million tonnes in the medium term and live cattle imports should reach one million head by 2013.
"We will be able to supply the increased demand, as there are record numbers of females in the herd as it heads towards 30 million, with most of the increase in northern Australia."
In conclusion Mr McRae said: "The domestic market is still our largest market. Retail beef prices have increased by 2.8pc over the past 12 months and are expected to continue to go up.
"On the world scene, food price inflation will force a reduction of tariff and trade barriers, making our beef exports more competitive in a world where population growth is creating increased demand, and there is a growing shortage of agricultural land with grazing country being taken over for grain production."
Mr Hughes also touched on the future for beef, saying although Brazil is the world's largest beef exporter and has been considered our biggest threat, its prices and Australian prices are very competitive and both countries sell about 70,000t of beef to the EU.
"Brazil has 180 million people. They eat beef like you wouldn't believe (more than twice the red meat consumption of Australia) and once the standard of living in Brazil and Argentina improves, they'll eat all the beef they produce.
"Australia actually exports beef to both those countries.
"Beef from South America isn't our biggest competitor - it's pork and chicken," Mr Hughes said.
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