Australian Cattle Prices Fall on Credit Crisis, Dry Weather

By Madelene Pearson

Oct. 24 (Bloomberg) -- Cattle prices in Australia, the world's second-largest beef exporter, had their biggest weekly fall in more than a year as the global credit crisis trimmed demand from exporters and dry weather forced ranchers to sell animals.

The benchmark Eastern Young Cattle Indicator fell 1 cent, to A$3.3575 ($2.19) a kilogram today, a four-month low. Prices have plunged 5 percent this week, the biggest weekly slump since the 5.9 percent fall in the week ended Sept. 21, 2007.

The sell off in livestock comes after record low rainfall in parts of the nation last month reduced feed supplies. Declines in Australian cattle and wool prices follow a slide in global commodities as access to credit dries up and concern gains that a global economic slowdown will trim demand for raw materials.

``Exporters ability to move cattle has slowed,'' Richard Norton, national livestock manager for AWB Ltd.'s rural unit Landmark, said by phone from Melbourne. Lines of credit have reduced to 10 to 15 days, from 30 to 60 days, he said. ``The market is very much reliant on what happens in the export market, given so much of our meat is exported.''

The number of cattle offered for auction rose 10 percent this week because of dry weather, he said. Some parts of the country ``desperately need spring rain very soon,'' he said.

Brazil is the world's largest beef exporter.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net