The best safeguards against cattle market dips

That point was agreed on by representatives of various beef industry sectors during a discussion on how investing in good times is crucial to being able to ride out downturns, conducted as part of the Northern Territory Cattlemens' Association conference in Darwin this month.

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Prominent seedstock producer David Bondfield, from Palgrove in Queensland, said the rising tide of high cattle prices in recent times had floated all vessels, with a scramble for every type of animal, every weight range and every quality range.

"Seedstock prices have reached levels we'd never anticipated," he said.

"Without a doubt, though, the seedstock market follows the commercial market and we are anticipating these high prices not to continue."

It will be the quality end of the seedstock business that would hold as markets start to slide, Mr Bondfield felt.

In the same manner, commercial producers who have taken the opportunity to upgrade genetics will be more protected as the tide turns.

Whilst the benefits of upgraded genetics are an incremental, it's still accumulative, Mr Bondfield said.

"Weight gain and turning off cattle earlier, and putting yourself in a position where you have market diversity, will place people well - genetics plays a big role in all this," Mr Bondfield said.

Tom Slaughter, from live export company Austrex, said investment in genetics was also critical in his sector.

"The more value we can provide our trading partners around the performance of the animals they are buying and their ability to turn them off faster is a benefit," he said.

Ben Dwyer, chief operating officer with big Western Australia beef operation Harvest Road, agreed investing in good times was key to riding out harder times.

Harvest Road, owned by the Forrest family, has a processing facility in Harvey.

"Our cattle market in WA isn't as volatile as the East Coast market but supply is still short," Mr Dwyer said.

"The drought through the Pilbara took a lot of cattle away and margins are tight."

Investments to reduce costs of operation had been ongoing, he said.

Asked his opinion on the survival of abattoirs in the north, Mr Dwyer said regardless of where it was situated, a facility needed a solid outlet for the animals processed and efficiency was critical.

"So any northern plant must be able to handle a lot of grinding meat and then value-add carcases as they come through," he said.

"In the north, it is hard to get high eating quality index cattle.

"And if live export is really kicking along, it will clean cattle out faster than a slaughterhouse can process them.

"Somewhere there is a harmony but it hasn't been found yet."

Far from seeing a processing plant in the north as competition, live exporters say there is a real need for one that is not too big but also not too seasonal.

Patrick Underwood, Australian Cattle Enterprises, said the live-ex trade was far more robust if it's suppliers had strong markets for older cattle more suitable to be killed in Australia.

"Buffalo are the same. It's not commercial to muster out of Arnhem land if you can only sell half the yarding to live-ex," he said.

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