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Drought-hit Australia culls cattle, clouds beef-supply outlook

Published on Feb 5, 2014 6:27 AM

SINGAPORE/SYDNEY (REUTERS) - A drought in Australia has forced ranchers in the world's third-biggest beef exporter to cull cows, stoking fears of a global beef shortage in coming years with the United States (US) herd at its lowest in six decades.

The slaughter of animals and effect of the drought could boost beef supply in the short term, but spells longer term shortages due to the reduced breeding stock.

"The big problem that we are going to have in the next 12 to 18 months is that progeny that would have been born today won't be there," said Mr Brad James, Rabobank's manager for the Northern Territory and the key beef producing state of Queensland, which is home to around half the country's 28 million head of cattle.

"Drought affected cows can't calve." The shortfall for a country that accounts for almost a fifth of the global trade in beef could drive up prices at a time when demand is rising in many emerging countries, where increasingly affluent middle classes are developing a taste for high-protein western diets and fast-food like hamburgers.

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