SOUTH SYDNEY, Australia – Expansion in production and exports of Australian beef in 2012 will be driven by a continued strong demand from an increasingly diverse range of global markets and favorable weather, according to Meat & Livestock Australia’s 2012 cattle industry projections released on Jan. 23.

For 2012, total Australian beef and veal production is predicted to reach a record 2.197 million tonnes cwt, up 2.2 percent, due to good weather resulting in heavier-than-average carcass weights, said Tim McRae, MLA chief economist.

“One major factor assisting the growth in Australian beef production has been the heavier carcass weights on the back of good seasons,” he said. “The influence of higher marking rates since 2010 will be reflected in cattle turnoff and beef production in the coming years.”

Although cattle numbers will increase, supply will remain relatively tight compared to the herd liquidating drought years of the past decade, McRae said. “Another favorable year, feed-wise, for producers should see herd rebuilding continue to limit female turnoff, while producers will compete for young cattle for finishing,” he added. “This will present challenges for the grain feeding sector.”

McRae continued that global beef demand is expected to be sustained, and possibly strengthened – particularly in Asia, South America and the Middle East. Simultaneously, global beef prices are tracking at historically high levels. Such factors will help to dampen the impact of the high American dollar.

Traditional Australian beef export markets will continue to be challenging, with the exception of the US market which is forecast to improve in 2012, as high prices attract additional product, reversing almost a decade of falling Australian shipments, McRae said. The 2012 outlook for the live cattle trade will continue to be dominated by prospects to Indonesia — total exports are forecast to decrease 16 percent in 2012. The pressure on the Indonesian market, combined with generally good seasons, may see cattle again heading south for processing, easing the expected tight supplies.