Required Report - public distribution

**Date:** 9/23/2005

**GAIN Report Number:** AS5027

AS5027

**Australia**

**Livestock and Products**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Kathleen Wainio, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Mike Darby, Agricultural Specialist

**Report Highlights:**

Exports of Australian beef are forecast to reach an historically high
level in 2005 on the strength of Japanese and Korean demand. Australian
feedlot capacity has surpassed one million head. Current record beef and
cattle prices are dependent on four major markets (domestic, Japan,
Korea and the U.S.), which account for 95 percent of Australian
production.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Canberra \[AS1\]

\[AS\]

Table of Contents

[SECTION ONE: SITUATION AND OUTLOOK
3](#section-one-situation-and-outlook)

[SECTION TWO: STATISTICAL TABLES 4](#section-two-statistical-tables)

[SECTION THREE: NARRATIVE ON SUPPLY AND DEMAND, POLICY & MARKETING
13](#section-three-narrative-on-supply-and-demand-policy-marketing)

[CATTLE 13](#cattle)

[Inventory 13](#inventory)

[Cattle on Feed 13](#cattle-on-feed)

[Live Exports 14](#live-exports)

[Slaughter 14](#slaughter)

[Production 15](#production)

[Consumption 16](#consumption)

[Trade 16](#trade)

[Exports 16](#exports)

[Impact of Resumption of U.S. Trade to Japan and Korea
16](#impact-of-resumption-of-u.s.-trade-to-japan-and-korea)

[Prices 17](#prices)

[Policy 17](#policy)

[SWINE 19](#swine)

[Inventory 19](#inventory-1)

[Slaughter 19](#slaughter-1)

[Production 20](#production-1)

[Trade 20](#trade-1)

[Imports 20](#imports)

[Exports 21](#exports-1)

[Consumption 21](#consumption-1)

[Prices 21](#prices-1)

[Policy 22](#policy-1)

# SECTION ONE: SITUATION AND OUTLOOK

Australian livestock industries have experienced relatively extreme
conditions over the past three years. Severe drought conditions have
sharply reduced feed grain and fodder supplies and created downward
pressure on inventories. The drought, which began in CY 2002 and ended
midway through CY 2005, is regarded by many as the worst in 100 years.

More recently, heavy soaking rains in many of the livestock producing
and feed grain growing areas, have seen pasture conditions and fodder
reserves improve greatly. This circumstance is likely to see average
cattle slaughter fall for CY 2005 and CY 2006 and inventories rise.
Production of beef is expected to rise in CY 2005 however, as slaughter
weights improve with seasonal conditions. Production is expected to fall
slightly in CY 2006 as producers continue to withhold cattle from
slaughter for breeding purposes.

Exports of Australian beef are forecast to remain at historically high
level for CY 2005 and CY 2006 as export demand maintains its strength.
The absence of US beef from the Japanese market has resulted in record
exports and the Australian feedlot industry has reacted by increasing
capacity, with record numbers on feed.

The strength of the Australian dollar continues to constrain performance
for export dependant industries such as pig meat. A higher dollar has
reduced export returns and increased consumer buying power in relation
to imports. Pork imports are forecast at record levels for CY 2005 and
CY 2006. Exports are forecast to increase modestly.

A Federal Court ruling in the first half of CY 2005 created uncertainty
for future pork imports. This ruling was recently overturned under
appeal, however the intermittent period saw high levels of pork imports,
particularly from the United States, in anticipation of a trade impact.
Following the favorable ruling, post expects monthly import levels to
revert those experienced prior to the court ruling with imports poised
to resume the long-term growth trend established over the past decade.

# SECTION TWO: STATISTICAL TABLES

+-------------------+------+------+------+------+------+------+------+
| PSD Table         |      |      |      |      |      |      |      |
|                   |      |      |      |      |      |      |      |
| Animal Numbers,   |      |      |      |      |      |      |      |
| Cattle            |      |      |      |      |      |      |      |
+-------------------+------+------+------+------+------+------+------+
|                   | **20 | **R  | **20 | **Es | **20 | **Fo | *    |
|                   | 04** | evis | 05** | tima | 06** | reca | UOM* |
|                   |      | ed** |      | te** |      | st** |      |
+-------------------+------+------+------+------+------+------+------+
|                   | **   | **   | **   | **   | **   | **   |      |
|                   | USDA | Post | USDA | Post | USDA | Post |      |
|                   | Offi | Esti | Offi | Esti | Offi | Esti |      |
|                   | cial | mate | cial | mate | cial | mate |      |
|                   | \    | \    | \    | \    | \    | \    |      |
|                   | [Old | [New | [Old | [New | [Old | [New |      |
|                   | \]** | \]** | \]** | \]** | \]** | \]** |      |
+-------------------+------+------+------+------+------+------+------+
| **Market Year     |      | **0  |      | **0  |      | **0  | *    |
| Begin**           |      | 1/20 |      | 1/20 |      | 1/20 | MM/Y |
|                   |      | 04** |      | 05** |      | 06** | YYY* |
+-------------------+------+------+------+------+------+------+------+
| **Total Cattle    | 2    | 2    | 2    | 2    | 2    | 2    | *(   |
| Beg. Stks**       | 6640 | 6640 | 6747 | 7100 | 7100 | 7600 | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Dairy Cows Beg. | 2028 | 2028 | 2041 | 2041 | 0    | 2050 | *(   |
| Stks**            |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Beef Cows Beg.  | 1    | 1    | 1    | 1    | 0    | 1    | *(   |
| Stocks**          | 2300 | 2300 | 2500 | 2500 |      | 2900 | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Production      | 9547 | 9988 | 9983 | 9880 | 0    | 1    | *(   |
| (Calf Crop)**     |      |      |      |      |      | 0860 | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Intra EC        | 0    | 0    | 0    | 0    | 0    | 0    | *(   |
| Imports**         |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Total Imports** | 0    | 0    | 0    | 0    | 0    | 0    | *(   |
|                   |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **TOTAL Imports** | 0    | 0    | 0    | 0    | 0    | 0    | *(   |
|                   |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **TOTAL SUPPLY**  | 3    | 3    | 3    | 3    | 2    | 3    | *(   |
|                   | 6187 | 6628 | 6730 | 6980 | 7100 | 8460 | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Intra EC        | 0    | 0    | 0    | 0    | 0    | 0    | *(   |
| Exports**         |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Total Exports** | 637  | 638  | 580  | 580  | 0    | 560  | *(   |
|                   |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **TOTAL Exports** | 637  | 638  | 580  | 580  | 0    | 560  | *(   |
|                   |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Cow Slaughter** | 3781 | 3781 | 3700 | 3700 | 0    | 3700 | *(   |
|                   |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Calf            | 960  | 929  | 985  | 790  | 0    | 750  | *(   |
| Slaughter**       |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Other           | 4012 | 4130 | 4315 | 4260 | 0    | 4100 | *(   |
| Slaughter**       |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Total           | 8753 | 8840 | 9000 | 8750 | 0    | 8550 | *(   |
| Slaughter**       |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Loss**          | 50   | 50   | 50   | 50   | 0    | 50   | *(   |
|                   |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Ending          | 2    | 2    | 2    | 2    | 0    | 2    | *(   |
| Inventories**     | 6747 | 7100 | 7100 | 7600 |      | 9300 | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **TOTAL           | 3    | 3    | 3    | 3    | 0    | 3    | *(   |
| DISTRIBUTION**    | 6187 | 6628 | 6730 | 6980 |      | 8460 | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Calendar Yr.    | 0    | 0    | 0    | 0    | 0    | 0    | *(   |
| Imp. from U.S.**  |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+
| **Calendar Yr.    | 0    | 0    | 0    | 0    | 0    | 0    | *(   |
| Exp. to U.S.**    |      |      |      |      |      |      | 1000 |
|                   |      |      |      |      |      |      | HE   |
|                   |      |      |      |      |      |      | AD)* |
+-------------------+------+------+------+------+------+------+------+

+-----------------+-----------------+-----------------+-----------------+
| Import Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Animal Numbers, |                 |                 |                 |
| Cattle          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **Number**      |
+-----------------+-----------------+-----------------+-----------------+
| **Imports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 23              | U.S.            | 0               |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 0               |                 | 0               |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 0               |                 | 0               |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **23**          |                 | **0**           |
+-----------------+-----------------+-----------------+-----------------+

+-----------------+-----------------+-----------------+-----------------+
| Export Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Animal Numbers, |                 |                 |                 |
| Cattle          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **Number**      |
+-----------------+-----------------+-----------------+-----------------+
| **Exports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 0               | U.S.            | 0               |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| Indonesia       | 387160          | Indonesia       | 359560          |
+-----------------+-----------------+-----------------+-----------------+
| Philippines     | 96016           | China           | 73911           |
+-----------------+-----------------+-----------------+-----------------+
| Malaysia        | 87955           | Malaysia        | 47541           |
+-----------------+-----------------+-----------------+-----------------+
| China           | 44138           | Philippines     | 46918           |
+-----------------+-----------------+-----------------+-----------------+
| Israel          | 43213           | Jordan          | 34154           |
+-----------------+-----------------+-----------------+-----------------+
| Jordan          | 23065           | Israel          | 20947           |
+-----------------+-----------------+-----------------+-----------------+
| Japan           | 22034           | Japan           | 18098           |
+-----------------+-----------------+-----------------+-----------------+
| Brunei          | 19796           | Brunei          | 17927           |
+-----------------+-----------------+-----------------+-----------------+
| Saudi Arabia    | 15969           | Mexico          | 5633            |
+-----------------+-----------------+-----------------+-----------------+
| Egypt           | 7583            | Kuwait          | 4668            |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 746929          |                 | 629357          |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 27319           |                 | 8391            |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **774248**      |                 | **637748**      |
+-----------------+-----------------+-----------------+-----------------+

+--------------------+-----+------+-----+------+-----+------+------+
| PSD Table          |     |      |     |      |     |      |      |
|                    |     |      |     |      |     |      |      |
| Meat, Beef and     |     |      |     |      |     |      |      |
| Veal               |     |      |     |      |     |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **  | **R  | **  | **Es | **  | **Fo | *    |
|                    | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                    | 4** | ed** | 5** | te** | 6** | st** |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **U | **   | **U | **   | **U | **   |      |
|                    | SDA | Post | SDA | Post | SDA | Post |      |
|                    | Of  | Esti | Of  | Esti | Of  | Esti |      |
|                    | fic | mate | fic | mate | fic | mate |      |
|                    | ial | \    | ial | \    | ial | \    |      |
|                    | \[O | [New | \[O | [New | \[O | [New |      |
|                    | ld\ | \]** | ld\ | \]** | ld\ | \]** |      |
|                    | ]** |      | ]** |      | ]** |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
| **Market Year      |     | **0  |     | **0  |     | **0  | *    |
| Begin**            |     | 1/20 |     | 1/20 |     | 1/20 | MM/Y |
|                    |     | 04** |     | 05** |     | 06** | YYY* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Slaughter        | 8   | 8853 | 9   | 8750 | 0   | 8550 | *(   |
| (Reference)**      | 753 |      | 000 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Beginning        | 100 | 100  | 60  | 76   | 43  | 44   | *(   |
| Stocks**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Production**     | 2   | 2114 | 2   | 2181 | 0   | 2131 | *(   |
|                    | 100 |      | 170 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Intra EC         | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total Imports**  | 10  | 6    | 7   | 7    | 0   | 7    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Imports**  | 10  | 6    | 7   | 7    | 0   | 7    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY**   | 2   | 2220 | 2   | 2264 | 43  | 2182 | *(   |
|                    | 210 |      | 237 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Intra EC         | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Exports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total Exports**  | 1   | 1389 | 1   | 1470 | 0   | 1390 | *(   |
|                    | 395 |      | 400 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Exports**  | 1   | 1389 | 1   | 1470 | 0   | 1390 | *(   |
|                    | 395 |      | 400 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Human Dom.       | 755 | 755  | 794 | 750  | 0   | 760  | *(   |
| Consumption**      |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Other Use,       | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Losses**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Dom.       | 755 | 755  | 794 | 750  | 0   | 760  | *(   |
| Consumption**      |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Ending Stocks**  | 60  | 76   | 43  | 44   | 0   | 32   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL            | 2   | 2220 | 2   | 2264 | 0   | 2182 | *(   |
| DISTRIBUTION**     | 210 |      | 237 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Calendar Yr.     | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imp. from U.S.**   |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Calendar Yr.     | 528 | 528  | 537 | 537  | 0   | 0    | *(   |
| Exp. to U.S.**     |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+

+-----------------+-----------------+-----------------+-----------------+
| Import Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Meat, Beef and  |                 |                 |                 |
| Veal            |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **MT**          |
+-----------------+-----------------+-----------------+-----------------+
| **Imports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 466             | U.S.            | 375             |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| New Zealand     | 3599            | New Zealand     | 5459            |
+-----------------+-----------------+-----------------+-----------------+
| Lebanon         | 112             | Brazil          | 245             |
+-----------------+-----------------+-----------------+-----------------+
| Brazil          | 69              | Italy           | 71              |
+-----------------+-----------------+-----------------+-----------------+
| Croatia         | 39              | Croatia         | 41              |
+-----------------+-----------------+-----------------+-----------------+
| Fiji            | 38              | Fiji            | 25              |
+-----------------+-----------------+-----------------+-----------------+
| Italy           | 19              | Lebanon         | 19              |
+-----------------+-----------------+-----------------+-----------------+
| Jordan          | 18              | Vanuatu         | 13              |
+-----------------+-----------------+-----------------+-----------------+
| Philippines     | 7               | Lithuania       | 8               |
+-----------------+-----------------+-----------------+-----------------+
| Taiwan          | 6               | Jordan          | 7               |
+-----------------+-----------------+-----------------+-----------------+
| Thailand        | 3               | Taiwan          | 2               |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 3910            |                 | 5890            |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 0               |                 | 34              |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **4376**        |                 | **6299**        |
+-----------------+-----------------+-----------------+-----------------+

+-----------------+-----------------+-----------------+-----------------+
| Export Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Meat, Beef and  |                 |                 |                 |
| Veal            |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **MT**          |
+-----------------+-----------------+-----------------+-----------------+
| **Exports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 375187          | U.S.            | 357058          |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| Japan           | 288860          | Japan           | 416690          |
+-----------------+-----------------+-----------------+-----------------+
| Korea South     | 67640           | Korea South     | 104707          |
+-----------------+-----------------+-----------------+-----------------+
| Taiwan          | 31659           | Taiwan          | 27137           |
+-----------------+-----------------+-----------------+-----------------+
| Canada          | 30100           | Indonesia       | 8506            |
+-----------------+-----------------+-----------------+-----------------+
| Indonesia       | 16960           | Canada          | 7839            |
+-----------------+-----------------+-----------------+-----------------+
| Philippines     | 10285           | Malaysia        | 7374            |
+-----------------+-----------------+-----------------+-----------------+
| Malaysia        | 9696            | New Zealand     | 6070            |
+-----------------+-----------------+-----------------+-----------------+
| New Zealand     | 7167            | Philippines     | 5938            |
+-----------------+-----------------+-----------------+-----------------+
| Mexico          | 5109            | United Kingdom  | 4981            |
+-----------------+-----------------+-----------------+-----------------+
| United Kingdom  | 4409            | Papua New       | 2980            |
|                 |                 | Guinea          |                 |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 471885          |                 | 592222          |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 39450           |                 | 28636           |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **886522**      |                 | **977916**      |
+-----------------+-----------------+-----------------+-----------------+

+--------------------+-----+------+-----+------+-----+------+------+
| PSD Table          |     |      |     |      |     |      |      |
|                    |     |      |     |      |     |      |      |
| Animal Numbers,    |     |      |     |      |     |      |      |
| Swine              |     |      |     |      |     |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **  | **R  | **  | **Es | **  | **Fo | *    |
|                    | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                    | 4** | ed** | 5** | te** | 6** | st** |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **U | **   | **U | **   | **U | **   |      |
|                    | SDA | Post | SDA | Post | SDA | Post |      |
|                    | Of  | Esti | Of  | Esti | Of  | Esti |      |
|                    | fic | mate | fic | mate | fic | mate |      |
|                    | ial | \    | ial | \    | ial | \    |      |
|                    | \[O | [New | \[O | [New | \[O | [New |      |
|                    | ld\ | \]** | ld\ | \]** | ld\ | \]** |      |
|                    | ]** |      | ]** |      | ]** |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
| **Market Year      |     | **0  |     | **0  |     | **0  | *    |
| Begin**            |     | 1/20 |     | 1/20 |     | 1/20 | MM/Y |
|                    |     | 04** |     | 05** |     | 06** | YYY* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Beginning  | 2   | 2658 | 2   | 2556 | 2   | 2600 | *(   |
| Stocks**           | 658 |      | 533 |      | 600 |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Sow Beginning    | 340 | 340  | 345 | 335  | 0   | 340  | *(   |
| Stocks**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Production (Pig  | 5   | 5327 | 5   | 5310 | 0   | 5351 | *(   |
| Crop)**            | 327 |      | 369 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Intra EC         | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total Imports**  | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Imports**  | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY**   | 7   | 7985 | 7   | 7866 | 2   | 7951 | *(   |
|                    | 985 |      | 902 |      | 600 |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Intra EC         | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Exports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total Exports**  | 1   | 1    | 2   | 1    | 0   | 1    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Exports**  | 1   | 1    | 2   | 1    | 0   | 1    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Sow Slaughter**  | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **OTHER            | 5   | 5428 | 5   | 5265 | 0   | 5350 | *(   |
| SLAUGHTER**        | 451 |      | 300 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total            | 5   | 5428 | 5   | 5265 | 0   | 5350 | *(   |
| Slaughter**        | 451 |      | 300 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Loss**           | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Ending           | 2   | 2556 | 2   | 2600 | 0   | 2600 | *(   |
| Inventories**      | 533 |      | 600 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL            | 7   | 7985 | 7   | 7866 | 0   | 7951 | *(   |
| DISTRIBUTION**     | 985 |      | 902 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Calendar Yr.     | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imp. from U.S.**   |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Calendar Yr.     | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Exp. to U.S.**     |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+

+-----------------+-----------------+-----------------+-----------------+
| Export Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Animal Numbers, |                 |                 |                 |
| Swine           |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **Number**      |
+-----------------+-----------------+-----------------+-----------------+
| **Exports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 1350            | U.S.            | 0               |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| Malaysia        | 220             | Philippines     | 1132            |
+-----------------+-----------------+-----------------+-----------------+
| Saudi Arabia    | 124             | Japan           | 23              |
+-----------------+-----------------+-----------------+-----------------+
| Vietnam         | 44              | Solomon Islands | 18              |
+-----------------+-----------------+-----------------+-----------------+
| Indonesia       | 33              |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 421             |                 | 1173            |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 0               |                 | 0               |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **1771**        |                 | **1173**        |
+-----------------+-----------------+-----------------+-----------------+

+--------------------+-----+------+-----+------+-----+------+------+
| PSD Table          |     |      |     |      |     |      |      |
|                    |     |      |     |      |     |      |      |
| Meat, Swine        |     |      |     |      |     |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **  | **R  | **  | **Es | **  | **Fo | *    |
|                    | 200 | evis | 200 | tima | 200 | reca | UOM* |
|                    | 4** | ed** | 5** | te** | 6** | st** |      |
+--------------------+-----+------+-----+------+-----+------+------+
|                    | **U | **   | **U | **   | **U | **   |      |
|                    | SDA | Post | SDA | Post | SDA | Post |      |
|                    | Of  | Esti | Of  | Esti | Of  | Esti |      |
|                    | fic | mate | fic | mate | fic | mate |      |
|                    | ial | \    | ial | \    | ial | \    |      |
|                    | \[O | [New | \[O | [New | \[O | [New |      |
|                    | ld\ | \]** | ld\ | \]** | ld\ | \]** |      |
|                    | ]** |      | ]** |      | ]** |      |      |
+--------------------+-----+------+-----+------+-----+------+------+
| **Market Year      |     | **0  |     | **0  |     | **0  | *    |
| Begin**            |     | 1/20 |     | 1/20 |     | 1/20 | MM/Y |
|                    |     | 04** |     | 05** |     | 06** | YYY* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Slaughter        | 5   | 5450 | 5   | 5300 | 0   | 5350 | *(   |
| (Reference)**      | 451 |      | 300 |      |     |      | 1000 |
|                    |     |      |     |      |     |      | HE   |
|                    |     |      |     |      |     |      | AD)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Beginning        | 12  | 12   | 10  | 10   | 5   | 10   | *(   |
| Stocks**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Production**     | 399 | 394  | 385 | 385  | 0   | 395  | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Intra EC         | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Imports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total Imports**  | 77  | 76   | 80  | 90   | 0   | 95   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Imports**  | 77  | 76   | 80  | 90   | 0   | 95   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL SUPPLY**   | 488 | 482  | 475 | 485  | 5   | 500  | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Intra EC         | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Exports**          |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Total Exports**  | 59  | 58   | 65  | 55   | 0   | 58   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Exports**  | 59  | 58   | 65  | 55   | 0   | 58   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Human Dom.       | 419 | 414  | 405 | 420  | 0   | 430  | *(   |
| Consumption**      |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Other Use,       | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Losses**           |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL Dom.       | 419 | 414  | 405 | 420  | 0   | 430  | *(   |
| Consumption**      |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Ending Stocks**  | 10  | 10   | 5   | 10   | 0   | 12   | *(   |
|                    |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **TOTAL            | 488 | 482  | 475 | 485  | 0   | 500  | *(   |
| DISTRIBUTION**     |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Calendar Yr.     | 1   | 0    | 10  | 40   | 0   | 40   | *(   |
| Imp. from U.S.**   |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+
| **Calendar Yr.     | 0   | 0    | 0   | 0    | 0   | 0    | *(   |
| Exp. to U.S.**     |     |      |     |      |     |      | 1000 |
|                    |     |      |     |      |     |      | MT   |
|                    |     |      |     |      |     |      | C    |
|                    |     |      |     |      |     |      | WE)* |
+--------------------+-----+------+-----+------+-----+------+------+

+-----------------+-----------------+-----------------+-----------------+
| Import Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Meat, Swine     |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **MT**          |
+-----------------+-----------------+-----------------+-----------------+
| **Imports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 0               | U.S.            | 377             |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| Canada          | 32399           | Canada          | 33918           |
+-----------------+-----------------+-----------------+-----------------+
| Denmark         | 20394           | Denmark         | 26685           |
+-----------------+-----------------+-----------------+-----------------+
|                 |                 | New Zealand     | 36              |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 52793           |                 | 60639           |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 0               |                 | 0               |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **52793**       |                 | **61016**       |
+-----------------+-----------------+-----------------+-----------------+

+-----------------+-----------------+-----------------+-----------------+
| Export Trade    |                 |                 |                 |
| Matrix          |                 |                 |                 |
|                 |                 |                 |                 |
| Meat, Swine     |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Time Period** | **Cal Yr**      | **Units:**      | **MT**          |
+-----------------+-----------------+-----------------+-----------------+
| **Exports       | **2003**        |                 | **2004**        |
| for:**          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| U.S.            | 33              | U.S.            | 28              |
+-----------------+-----------------+-----------------+-----------------+
| **Others**      |                 | **Others**      |                 |
+-----------------+-----------------+-----------------+-----------------+
| Singapore       | 26874           | Singapore       | 21448           |
+-----------------+-----------------+-----------------+-----------------+
| Japan           | 12537           | Japan           | 8601            |
+-----------------+-----------------+-----------------+-----------------+
| New Zealand     | 9250            | New Zealand     | 7694            |
+-----------------+-----------------+-----------------+-----------------+
| Philippines     | 2826            | Philippines     | 2284            |
+-----------------+-----------------+-----------------+-----------------+
| Taiwan          | 1630            | Korea South     | 1608            |
+-----------------+-----------------+-----------------+-----------------+
| Korea South     | 1402            | Hong Kong       | 1341            |
+-----------------+-----------------+-----------------+-----------------+
| Hong Kong       | 917             | Taiwan          | 850             |
+-----------------+-----------------+-----------------+-----------------+
| South Africa    | 543             | Papua New       | 386             |
|                 |                 | Guinea          |                 |
+-----------------+-----------------+-----------------+-----------------+
| China           | 315             | Malaysia        | 350             |
+-----------------+-----------------+-----------------+-----------------+
| Germany         | 252             | South Africa    | 316             |
+-----------------+-----------------+-----------------+-----------------+
| Total for       | 56546           |                 | 44878           |
| Others          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Others not      | 1454            |                 | 1170            |
| Listed          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Grand Total** | **58033**       |                 | **46076**       |
+-----------------+-----------------+-----------------+-----------------+

# SECTION THREE: NARRATIVE ON SUPPLY AND DEMAND, POLICY & MARKETING

## CATTLE

### Inventory

Australia's cattle inventory is forecast to rise by nearly two percent
to 29.3 million head by the end of CY 2006. This increase is largely in
line with Meat and Livestock Australia (MLA) and Australian Bureau of
Agriculture and Resource Economics (ABARE) forecasts, which have
inventories increasing but slightly lower. High prices and improved
seasonal conditions are the main reasons for the forecast increase in
cattle inventories. A return to more normal weather conditions has seen
pasture conditions and fodder reserves greatly improve following three
years of drought.

Post has revised the closing inventory for CY 2005 upwards slightly to
27.6 million head. The mitigation of drought conditions in mid-2005 and
record cattle prices have greatly increased confidence in this sector.
Lower slaughter numbers and improved breeding conditions have
facilitated higher cattle inventories.

Closing inventory for CY 2004 has been revised downwards slightly to
27.1 million head, largely in-line with MLA's inventory figure.

![](media/image2.wmf)

*Source: ABARE Data (July-June)*

### Cattle on Feed

The number of Australian cattle on feed has risen significantly in
recent times, driven by increased demand for Australian feeder cattle in
Japan following the exclusion of U.S. beef from this market.

Industry sources recently reported that the number of cattle on feed in
the March 2005 quarter reached a record 856,025 head, up nearly 14
percent on the previous quarter and over 11 percent on the previous
record set in the September quarter of 2004. Australian feedlot capacity
also reached record levels at 994,692 head. Finally, the number of
cattle on feed destined for the Japanese export market reached a record
519,491 head.

According to media reports, Australian feedlot capacity has now
surpassed one million head. Post anticipates numbers of cattle on feed
to remain at record or near-record levels for the remainder of CY 2005
and into CY 2006.

![](media/image3.wmf)*Source: Australian Lot Feeders Association/ Meat
and Livestock Australia survey (Quarterly)*

### Live Exports

Live exports for CY 2006 are forecast at 560,000 head, down from the
previous year. This figure represents a historically low level according
to ABARE data. A strong Australian dollar, strong competition from
processors and a lack of cattle suitable for live export have seen live
export levels decline in previous years.

Post estimates live exports for CY 2005 at 580,000 head in line with MLA
figures, unchanged from previous report. Live exports for CY 2004 have
been revised upwards only slightly 638,000 head in line with revised
Australian Bureau of Statistics (ABS) figures.

![](media/image4.wmf)

*Source: ABARE Data (July-June year)*

### Slaughter

Total slaughter for CY 2006 is forecast at 8.55 million head, down over
two percent from the revised estimate for the previous year. MLA have
also forecast a decline. Post anticipates cattle to be held back from
slaughter as producers rebuild herd numbers following three years of
drought conditions.

Post estimates slaughter at 8.75 million head for CY 2005, down one
percent on the revised figure for the previous year. Year-to-date ABS
figures show a 0.5 percent decline for the first half of CY 2005 and
industry data show slaughter declining over the past nine consecutive
months. Post anticipates slaughter to continue to fall for the remainder
of CY 2005 bringing the total slaughter number down by approximately one
percent. This continual fall in slaughter numbers is due to greatly
improved seasonal conditions.

Total slaughter for CY 2004 has been revised upwards to 8.84 million
head in line with revised ABS figures. This upwards revision of this
slaughter figure is representative of the severity of the drought
experienced in key livestock producing regions of Australia.

![](media/image5.wmf)

*Source: ABARE Data (July-June year)*

### Production

Total production of beef and veal in CY 2006 is forecast at 2,131
thousand metric tones (TMT) in carcass weight equivalent (CWE), down
over two percent on the revised estimate for the previous year. This
fall is almost directly in line with the forecast fall in cattle
slaughter for CY 2006, assuming a slightly lower average carcass weight.
The forecast fall in production in CY 2006 is reliant upon the continued
return to more normal weather conditions experienced from mid 2005
onwards. A return to drought conditions would likely see higher than
forecast slaughter and production.

Production of beef and veal for CY 2005 is estimated at 2,181 TMT (CWE),
slightly higher than the figure in Post's previous report. If achieved,
this figure would represent an increase of three percent on the revised
figure for the previous year. This level of is largely in line with ABS
year-to-date data. Post has taken into consideration a slight decrease
in slaughter levels expected in the second half of CY 2005. Post has
also taken into consideration significantly higher slaughter weights due
to greatly improved pasture conditions.

Total beef production in CY 2004 has been revised downwards slightly to
2,114 TMT in line with revised ABS figures.

![](media/image6.wmf)

*Source: ABARE Data (July-June year)*

### Consumption

Total beef and veal consumption for CY 2006 is forecast at 760 TMT, up
slightly on the revised estimate of 750 TMT for the previous year.
Slightly weaker export demand is expected to see domestic consumption
move upwards slightly.

### Trade

#### Exports

Total beef and veal exports in CY 2006 are forecast at 1,390 TMT (CWE),
down five percent on the revised estimate for the previous year. The
forecast fall in slaughter and production due to improved seasonal
conditions is likely to reduce the available surplus of beef suitable
for export. Furthermore, the anticipated re-entry of U.S. beef into
Japan and Korea is also likely to reduce export demand in those markets.
These factors combined with stronger domestic consumption are likely to
see exports fall in CY 2006.

Exports of beef and veal for CY 2005 are estimated at 1,470 TMT (CWE),
up significantly on the 1,380 TMT in Post's previous report. Official
ABS year-to-date figures show exports up by 12 percent (January -- July)
however Post sees this slowing in the second half of CY 2005 (as turnoff
falls) to give an overall increase of five percent. Dry conditions in
the first half of CY 2005 increased the availability of beef suitable
for export to Japanese markets, however the second half of CY 2005 has
produced excellent seasonal condition and turnoff and slaughter is
expected to fall sharply.

Exports of beef and veal for CY 2004 stand at 1,389 TMT (CWE), in line
with official ABS figures and up slightly on Post's previous report.

![](media/image7.wmf)

*Source: ABARE Data (July-June year, Shipped Weight)*

##### Impact of Resumption of U.S. Trade to Japan and Korea

Australian beef exporters are wary of the possibility of a significant
reduction in demand and price for beef in 2006, with expectations of
resumption in trade of U.S. and Canadian beef to North Asian markets.
The industry now anticipates a larger price impact than previously
forecast in part because the U.S.-Japanese beef import protocol will
likely include U.S. beef from USDA A40 grade cattle. The industry is
also watching the Korean market to see if cattle less than 30 months of
age (per OIE guidelines) will be accepted, rather than beef from cattle
less than 21 months. Trade sources report both Japan and Korea are
reducing stocks in anticipation of the re-entry of North American beef.

According to MLA, the Australian beef and cattle industry is more
vulnerable to a major price decline now than at any time in the past 3
decades. Australia's current record beef and cattle prices are currently
dependent on four major markets (domestic, Japan, Korea and the U.S.),
which account for 95 percent of Australian production. Any decline in
demand in these markets would have a resounding impact on Australian
prices.

Australian exports to other markets has fallen over the past couple
years, particularly to traditional markets such as South East Asia, Hong
Kong and China. Australian trade sources report significant inroads have
been made by South American, Chinese and New Zealand beef exporters in a
number of markets including Taiwan, Hong Kong, the Philippines,
Indonesia and the Middle East. Further, exports to more minor markets
are expected to remain low over the next few years.

Australian industry sources report price volatility in the Japanese
market resulting from concerns over triggering the safeguard, which
caused major distortions in trade during Summer 2005. Industry sources
are not ruling out the possibility of triggering the safeguard,
especially following the resumption of Japanese imports of North
American beef. Even if the safeguard were not triggered, speculation of
the possibility affects trade. MLA reports triggering the safeguard is a
further possibility in subsequent years following the resumption of
trade with North America.

### Prices

Live cattle prices are expected to weaken slightly in CY 2006 in line
with expected falls in export prices received in both the U.S. and
Japan. CY 2005 has seen record or near-record prices received for
certain types of live cattle and beef. These high prices have created a
high level of confidence in beef industry participants. Post believes
that these high prices, combined with a return to normal seasonal
conditions following years of drought are responsible for the end of
partial herd liquidation in Australia and a return to herd rebuilding
experienced prior to the drought.

![](media/image8.wmf)

*Source: ABARE Data (July-June year)*

### Policy

[Levy increase]{.underline}

The Australian Beef Cattle industry and Federal Government recently
agreed to increase the levy (check off) on beef cattle transactions from
A\$3.50 to A\$5.00 per head. This increase, to be introduced on January
1, was supported by a popular majority of beef producers and more
recently approved by the Federal Agricultural Minister.

The increase is expected to almost double the availability of funds for
promotion from an estimated A\$22.1 million to 44.2 million. The Federal
government stated, in its reasons for approving the increase, the
success of low cost producers such as Brazil and anticipated re-entry of
the United States and Canada into global markets would require a boost
in marketing efforts. However, according to industry sources, much of
the increased funding will likely be spent on promoting beef on the
domestic market, which currently accounts for around a third of
Australian production.

[National Livestock Identification Scheme]{.underline}

Australia has begun rolling out its National Livestock Identification
Scheme (NLIS) for cattle, both beef and dairy. As of July 1, 2005, the
system became mandatory, with the exception of Queensland and the
Northern Territory, which will not achieve full compliance until 2007.

Under NLIS, it is mandatory for "whole of life" Radio Frequency
Identification Devices (RFID's) to be fitted to cattle prior to leaving
the property of birth. All livestock movements over the lifetime of the
animal are recorded electronically at central points such as livestock
auctions, feedlots and slaughter plants. A central database records the
movement of cattle using the existing Property Identification Code (PIC)
used by the previous "tail tag" system. (Tail tags are due to be phased
out over the next year).

NLIS only covers cattle and buffalo. At this point sheep, pigs and goats
are not affected by NLIS. These industries are expected to follow suit
in one form or another.

NLIS is expected to deliver much improved trace-back capacity to assist
with issues such as disease and chemical residue control. Industry
anticipates that market access may also be improved. NLIS is also
expected to deliver benefits in the areas of carcass performance
feedback and on farm health management. Industry proponents also suggest
it will be valuable in curbing stock theft.

Australian livestock industries are heavily reliant on export markets,
with around 60 percent of Australian beef and sheep meat production
exported annually. Consumer expectations, quality assurance, disease and
residue management have increased the need for greater accountability
within Australian livestock industries.

NLIS was formed under a joint industry/government partnership
(SAFEMEAT). However, industry through its producer service organization,
Meat and Livestock Australia, now largely manages the database.

[Australia-U.S. Free Trade Agreement and Beef]{.underline}

The Australia-U.S. Free Trade Agreement (FTA) went into effect on
January 1, 2005. Concerns over the impact the FTA may have on Australian
industries and on government policies has been hotly debated.

The United States is currently Australia's second largest beef export
market, with exports subject to a tariff rate quota (TRQ). Under the
TRQ, Australia is granted duty-free access for the quota amount, with
tariffs applied to any additional quantities. Under the FTA, Australia
received an additional quota allocation for manufacturing beef, once
U.S. beef exports return to their 2003 (pre-BSE) levels, or three years
after implementation of the agreement, whichever occurs first. The U.S.
"above-quota" tariff on Australian beef is to be phased out over an
18-year period. The previous U.S. tariff of \$US4.4 cents per kilogram
on the quota quantity was eliminated upon enactment of the FTA.

Under the FTA, the United States will have immediate duty-free access to
Australia for beef and beef products, as well as all other agricultural
products. U.S. beef exports to Australia, however, are temporarily
banned due to the detection of BSE in the United States.

[Australian Government changes rules for allocating US beef
quota]{.underline}

The Australian Federal recently changed the rules for the allocation of
US Beef quota among Australian beef exports. Under the new arrangements,
if Australian calendar year beef exports to the US reach 85 percent of
the total quota prior to October 1, the remaining 15 percent of the
quota will be allocated to exporters based on their performance over the
past two years.

## SWINE

### Inventory

Inventory for CY 2006 is forecast to close at 2.6 million head,
unchanged from the estimate for the previous year. Increasing pressure
from imports and the continued strength of the Australian dollar are
expected to limit increased inventories, despite improved supplies of
grain. Closing inventory for CY 2006 is forecast to remain unchanged at
2.6 million head.

![](media/image9.wmf)

### Slaughter

Total slaughter for CY 2006 is forecast at 5.35 million head, up
significantly on the 5.27 million head estimated for the previous year.
An increase in sow numbers is expected to increase turnoff and
slaughter. Post anticipates the pig industry will grow beyond CY 2006
having reconsolidated in CY 2005 and CY 2006.

The slaughter estimate for CY 2005 has been revised downwards slightly
to 5.27 million head. ABS year-to-date data shows declining slaughter
levels towards the second half of CY 2005 compared with the same period
for the previous year. Post anticipates that the slowing slaughter rate
will slightly lower slaughter over CY 2005.

![](media/image10.wmf)

*Source: ABARE Data (July-June)*

### Production

Total pork production is forecast at 395 TMT in CY 2006, up slightly on
the 385 TMT estimated for the previous year. Improved availability of
grain due to an ending of drought conditions is expected to see pork
production increase slightly due to improved slaughter weights, despite
falling slaughter levels. The Australian pig industry has established a
long-term trend for gradually increasing slaughter weights as feed grain
supplies allow.

Production for CY 2005 is estimated at 385 TMT, down slightly on the 394
TMT recorded for the previous year. The estimated decline is in line
with ABS year-to-date data showing a two percent decline for the first
half of CY 2005.

![](media/image11.wmf)

### Trade

#### Imports

Total imports for CY 2006 are forecast at 95 TMT (CWE), up on the 90 TMT
estimated for the previous year. If achieved, this would represent an
all-time record in Australian pig meat imports. The United States has
emerged as a significant supplier of imported pork. Pig meat imports for
CY 2005 are estimated at 90 TMT (CWE), up sharply on levels recorded for
the previous year.

Pork imports for CY 2004 have been revised downwards slightly to 76 TMT
(CWE), in line with revised ABS statistics. This equates roughly to a
shipped weight volume of 61 TMT. Post uses a conversion factor of 1.25
to convert shipped weight to Carcass Weight Equivalent (CWE).

#### Exports

Exports of pig meat for CY 2006 are forecast at 58 TMT (CWE), up on the
revised estimate of 55 TMT for the previous year. Slightly higher
production levels are likely to see exports increase slightly. Exports
for CY 2005 are estimated at 55 TMT, down slightly on the previous year
and down sharply on the figure quoted in Post's previous report.
Official ABS year-to-date figures have exports down significantly
compared to the same period in the previous year. A stronger Australian
dollar has lowered the prospects for pork exports in CY 2005.

![](media/image12.wmf)

### Consumption

Domestic consumption is forecast at 430 TMT for CY 2006, up on the 420
TMT estimated for the previous year. A general trend towards pork and
poultry has seen consumption of pork increase steadily over the past
decade. Furthermore, the ever-broadening cultural base within Australia
has seen dietary intake change over the past decade with the inclusion
of more Asian style meals. This trend has aided increased consumption of
pig meat domestically.

### Prices

The prices received by Australian pig meat producers have generally been
considered low in recent times. This combined with high feed grain
prices and low feed grain availability during the drought saw
diminishing margins in the pig meat industry. ABARE have forecast pig
meat prices to remain relatively low for the remainder of CY 2005 and
into CY 2006. This is likely to constrain heard expansion to minimal
levels.

# 

![](media/image13.wmf)

### Policy

AUSTRALIAN FEDERAL COURT UPHOLDS PORK APPEAL

On September 16, the Full Bench of the Australian Federal Court upheld
the appeal by Australia's Director of Quarantine against a May 27, 2005
Court judgment affecting the importation of pig meat into Australia.
Australian Pork Limited (APL) and Windridge Farms had challenged a
policy determination by the Director of Quarantine that set conditions
for the importation of pork. The APL action had also challenged the
subsequent issuing of one specific import permit based on the policy
conditions.

The Court Decision means that pork from third countries may enter
Australia under the existing conditions. Further, the current 83 import
permits remain valid and new import permits may be granted. The permit
that had been suspended is re-validated. Consideration of the additional
countries seeking access for pork to Australia (Italy, Sweden and
Finland) will continue.

The Full Court Decision is available at the following website:
<http://www.austlii.edu.au/au/cases/cth/FCAFC/2005/206.html>

Suspected Case of Post Weaning Multi-Systemic Wasting Syndrome (PMSW) in
Australia: The results remain inconclusive on the suspect case of PMSW
in South Australia. Restriction of movement continues from the state and
the investigation is continuing.