Australian beef cattle producers to rebuild their depleted herds

In a development that will have profound ramifications for the beef cattle industry, many producers are considering rebuilding their depleted herds for the first time in years.

National turnaround: Beef production is expected to decline as many producers rebuild their cattle herds. Picture: Zoe Phillips

FOR the first time in three years, Australia’s beef cattle herd is gearing up for a rebuilding phase, with widespread rainfall driving restocker demand.

But the ongoing global coronavirus outbreak will continue to add a layer of uncertainty to the industry in the near future, according to two industry reports.

The latest Meat and Livestock Australia cattle projections report, released today, forecast a decline in national beef production as a potential herd rebuild emerges, while annual adult cattle slaughter was revised lower off the back of improved seasonal conditions.

For the first time since 2017, many producers are considering rebuilding depleted herds, in particular across southern Queensland and NSW.

MLA forecast adult cattle slaughter this year will reach 6.9 million head, a 19 per cent drop compared to last year.

MLA senior market analyst Adam Cheetham said the impact of improved conditions could lead to a decline in cattle turn-off “to the lowest point since the mid 1990s, and remain at historically low levels for the next two years”.

“The flow-on effect of a sharp contraction in adult cattle slaughter has seen a decline of 16 per cent in the national beef production forecast to 2.05 million tonnes carcass weight, with increasing carcass weights only offsetting some of the decline in slaughter,” Mr Cheetham said.

He said the global coronavirus outbreak has created a sense of turmoil and uncertainty around the export market, with beef exports forecast at 990,000 tonnes shipped weight, a drop of 20 per cent on last year.

And domestic conditions continue to be a key factor influencing Australian cattle prices. “However, developments in local and global markets, specifically food service demand and ongoing economic conditions, will continue to pressure prices,” Mr Cheetham said.

“Australian prices remain out of synch with global price trends, largely due to the influence of domestic conditions.”

The latest Rabobank Australian beef cattle seasonal outlook report, released yesterday, forecast Australian beef production to drop to 2.1 million tonnes.

Rabobank senior animal proteins analyst Angus Gidley-Baird said low cattle availability this season would create challenges across the industry, including Australia’s production of lean manufacturing beef.

“The US is a large market for lean manufacturing beef — 62 per cent of exports to the US

are manufacturing beef — and, all other things being equal, we expect exports to the US to

drop in 2020,” Mr Gidley-Baird said.

MORE LIVESTOCK

PUTTING HAND UP FOR ONLINE AUCTIONS PAYS OFF

PRODUCERS WARM TO IDEA OF SET PRICE

PRIME CATTLE: FEEDER CATTLE LOSING STEAM