Red Meat Advisory Council’s John McKillop joins The Australian Ag Podcast
The United States cattle herd is shrinking due to a lack of significant pasture growth, but how is this affecting our market?
The shrinking United States cattle herd is yet to have any impact on Australian prices because producers are still selling off stock.
Red Meat Advisory Council independent chairman John McKillop told The Australian Ag Podcast cattle turn-off in the US remained high as there had not been significant pasture growth.
“They are still turning off cattle at relatively high prices … they are saying there are reasonably good prices, we don’t have a lot of feed, let’s make hay while the sun shines,” Mr McKillop said.
He said the latest report from the United States Department of Agriculture, released last week, predicted a 1.2 per cent lift in production which some may question as “they should be in a period of herd rebuilding”.
“They haven’t quite got to that (rebuilding) yet,” Mr McKillop said.
The USDA survey showed there were 95.9 million cattle in the US at the start of July, a fall of 3 per cent on the already depleted herd of a year ago. The numbers included 38.9 million breeding females and 13.1 million cattle in feedlots.
Further USDA analysis predicts US beef production in 2023 will be 12.3 billion kilograms, the fourth highest in history and only 4 per cent less than the record volume set last year.
And while the situation in the US does influence world beef prices, Mr McKillop said he had been surprised by how far the Australian market had fallen.
“It is always a danger when prices get too high as generally they have to come back at some point,” he said.
“I would not have thought it would have dropped as far as it has.
“But I think this fall has genuinely taken a lot of people by surprise particularly those who went out and bought large numbers to put on feed or made an acquisition of a property on a walk-in-walk-out basis … that are now sitting on cattle that are worth significantly less than the day they settled.”
Mr McKillop said prices would “presumably come back at some point”.
“We are now probably closer to the longer term trend and it probably overcorrected somewhat,” he said.
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