SYDNEY, Oct. 22 (Xinhua) -- Australian livestock producers have been facing an unprecedented period of market volatility in recent years, with swings in cattle and sheep prices reaching record extremes, an industry report said Wednesday.
While volatility has long been a feature of livestock markets, both the scale and frequency of price swings have intensified significantly over the past five to 10 years, the RaboResearch division of Rabobank, an agribusiness financial service provider, said in its report "Managing increased volatility in Australian livestock markets."
This high level of volatility is likely to persist for Australia's livestock sectors in the "short to medium term," the report said, adding that prices have been on another upward trend since 2023.
A combination of contributing factors is likely behind the extremes in livestock market volatility, including increased exposure to geographically larger markets, growth in information flows, an increasingly unstable global trade environment, changing industry structure and increasing debt levels, said RaboResearch senior animal proteins analyst Angus Gidley-Baird, the report's author.
"It is no longer just local, smaller market conditions that influence buyer and seller behavior, but rather the larger, broader market that causes bigger market movements," the report said.
The report also cited the impact of geopolitical instability, growing global protein consumption, and disease outbreaks, which "affect not only production but also trade arrangements," Gidley-Baird said.
Changes to industry structure, with an increasing proportion of livestock numbers in large or small farms and less in medium-sized operations, lead to different decision-making.
"Smaller farmers may not be driven by the same profit motives or have access to alternative income streams, and larger, more corporate-style operations may have different reporting responsibilities and decision-making processes, impacting their participation in the market and possibly adding to more pronounced market movements," he said.
Gidley-Baird called for a strategic approach that reinforces adaptability, promotes resilience and improves predictability to help producers navigate uncertainty with greater confidence and avoid reactive decisions that may carry long-term consequences. ■
