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OUR OPERATING ENVIRONMENT
Global markets for red meat have been buoyant over the past year, driven by growing demand for protein in Asia, Europe and the Middle East. In addition, constraints on global supply have tightened considerably, due to the sharp rise in production costs (mainly for grain and fuel), competition for land from cropping and changes in government policies (for example the EU CAP reforms and bio-fuel mandates and supports).
This, together with the continuation of strong demand from Japan and Korea with their restrictions on US beef (due to BSE-related controls), has seen continued high Australian beef exports to North Asia, the emergence of a major market in Russia and growth to South East Asia.
Expenditure for red meat on the domestic market also grew further over the past year, assisted by economic growth, continued progress in meat quality and marketing. However, the ‘mortgage stress’ and general economic slowdown started to impact on sales as the year progressed, particularly in the middle-to-upper foodservice sector and higher priced cuts at retail.
