Essays on Price of the Australian Beef Industry Case Study

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The paper 'Price of the Australian Beef Industry" is a great example of a macro and microeconomics case study.   Beef is one of the agricultural products produced in Australia with demand for beef products emanating from both local and international markets. Australia stands in third place after the United States of America and Brazil in production of beef products. Interestingly, the bulk of Australia’ s beef is consumed abroad; demand and supply factors that determine the market for Australia’ s beef are varied as much as the different markets where the beef is sold(PWC, 2011). This paper examines the Australian beef industry presenting the factors that influence the price of beef.

Firstly, it examines the characteristics of Australian beef that influence its price elasticity. Secondly, it examines the demand and supply for beef products both locally and internationally. Subsequently, this paper discusses the role played by beef cooperatives and councils in influencing the Australian beef industry as far as influence demand, price and supply are concerned. It will also explore policies that govern the Australian beef industry and how they influence demand, supply and pricing trends. Characteristics of Australian Beef The grades of beef produced in Australia are categorized according to the region in which they are produced.

Beef is categorized into either those produced from cattle reared in the north or produced from cattle reared in the south. The major difference between the two beef qualities is the ability of cattle reared in either zone to adapt to climatic conditions. Beef produced in the north lacks adequate pasture hence southern meat is usually deemed to be of superior quality than meat from the north.

Beef from the north, therefore, fetches lower prices in the market than their southern counterparts; therefore southern beef attracts more demand than beef from the north. Southern beef is particularly in high demand in high-end markets such as Japan and The Republic of Korea (PWC, 2011) and naturally attracts higher prices (Meat Trade News Daily, 2012). Australian beef is usually considered of high quality and disease-free (PWC, 2011). Breeds such as Bos Indicus are accustomed to beef farmers in the north due to their ability to withstand the heat and resistance to ticks.

The northern farmers target Asian markets where they export live cattle. This way they earn better revenues from the exports than when the beef is cold processed. On the other hand, the Bos Taurus breed is a favorite for southern farmers who prefer it for its high-quality beef that earns handsomely in a processed form unlike the northern bred Bos Indicus (PWC, 2011). Beef produced in the northern parts of the country is deemed inferior due to the lack of pasture in the north. Northern farmers opt to export their beef as live cattle by shipping them to the Asian markets.

Australia as a beef exporter specifically enjoys shipping advantages when exporting beef to Asia due to their proximity to each other (Linehan et al, 2012). This provides the economic advantage of minimizing transportation costs which places Northern Australia beef farmers at an advantage to their competitors in the USA and Europe as they are able to meet Asia’ s beef demands with comparatively significant lower cost. Their beef is priced competitively and they earn more by shipping the cattle alive. On the other hand, the southern farmers who produce high-quality meat sell their beef in high-value markets that include Korea, Russia and Japan where they get lucrative returns (PWC, 2011).


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