Livestock prices set to bounce on demand

Livestock farmers can look forward to improved returns this year as meat prices catch up with inflation, according to National Australia Bank Europe senior economist Tom Vosa.

The price of cereals, oils, fat and dairy products had all increased and only meat prices were lagging behind, Vosa told a fringe seminar at the Oxford Farming Conference.

"We can expect cattle and sheep prices to start reflecting higher production costs on the back of increasing world demand triggered by lower production, population growth and the move to a western-style diet in developing economies," said Vosa.

Meat consumption in these countries had increased from 10kg per capita in 1964-66 to 26kg in 1997-99 and was projected to grow to 37kg by 2030. The consumption of dairy products had followed a similar pattern. The banking crisis meant that the real growth would take place in emerging and developing economies which accounted for 85 per cent of the world population.