AACo bounces back as Americans look for better steaks

Queensland beef producer Australian Agriculture Company has posted a big jump in profit as Wagyu sales jumped and its US market made significant gains.

Nov 18, 2021, updated Nov 19, 2021
AustAg managing director Hugh Killen (photo: UQ)

AustAg managing director Hugh Killen (photo: UQ)

AACo had an interim bottom line result of $83.2 million against a $1.7 million loss for the previous corresponding period. However, this was boosted by a revaluation of its herd.

On an operating level the $30 million profit was still a 27 per cent increase on the previous corresponding period.

Managing director Hugh Killen said the result was supported by higher cattle sales margins and record high prices.

It had also diverted sales away from Asia to the American market where there was a strong demand for high value cuts.  However, Asia still represented 50 per cent of total meat sales.

“Overall, the business delivered a 9 per cent increase in average meat sales pricing compared to the previous period, driven by strategic market allocation and the continued execution of our branded beef strategy,” Killen said.

He said the global demand for beef outweighed supply and there was strong demand for beef in Asia where China’s pork production was forecast to contract further next year and beef imports grown for the eighth consecutive year.

In Australia, positive conditions were encouraging producers to retain stock for breeding purposes supporting the start of a national herd rebuild from the 25 year lows in 2020.

AACo said high demand for cattle in a low supply environment had driven strong prices but slaughter rates were not expected to exceed levels hit in 2020 until 2023.

In the US, branded meat sales on an average price per kilogram bases were up 33 per cent. In Australia it was up 9 per cent.

AACo will release a sustainability report tomorrow that it said would underpin its future as a producer and landowner.

“The framework will embed sustainability at the core of our business and will be used to prioritise our activities, set goals and hold ourselves accountable,” Killen said.

“It deals with the here and now while helping us evolve together to benefit future generations.”



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