Aussie abattoirs 15 per cent short of kill capacity

Processors have lifted production by 28 per cent in early June, but remain hindered by significant staff shortages.

AUSTRALIAN processors could be killing up to 150,000 cattle a week but remain hindered by staff shortages, the industry’s peak body says.

And while a lift in shifts could shorten some of the delays in booking stock into abattoirs, the ramp up of the cattle herd remains the major influence on prices, according to processors.

It was announced this week the national cattle herd had hit a decade high of 28.7 million – and those bigger numbers are flowing through.

In the past six weeks, 707,762 cattle have been processed in Australian abattoirs – a lift of 27 per cent compared to last year.

To date in June, the weekly average kill has been 122,284.

Australian Meat Industry Council chief executive officer Patrick Hutchinson said to put this in perspective, national weekly kills hovered at about 150,000 through 2014 and 2015.

“Overall capacity will be increased (soon) due to several plant upgrades or new establishments coming online, however, plants are struggling to quickly add shifts due to ongoing workforce shortages,” Mr Hutchinson said.

“The jump in supply is the single biggest driver for the slide in the market. However, this has been compounded by the withdrawal of restocker buyers, processing workforce shortages, inflated supply chain costs and uncertain consumer demand amid increased prospects of a recession.”

Cattle kill numbers have lifted production in early June.

Mr Hutchinson said some abattoirs were booked up months in advance.

“In light of this bottleneck, markets are working as one would expect, sending price signals back to producers to ease off on supply,” he said.

“However, clearly producers are also responding to concerns of a drier seasonal outlook.”

Mr Hutchinson said supply would continue to be the biggest influence on price for the remainder of the year.

“Processors will do our best to ramp up capacity to match the supply increase, as it’s in our interest to do so, but we are navigating the same hurdles that the rest of the economy is facing – namely, ongoing workforce shortages,” he said.

And while abattoirs say they are killing as many as they can, the increase in availability of stock has seen prices continue to fall.

The heavy steer indicator closed on Monday at 276c/kg liveweight, 156c/kg or 36 per cent lower than a year ago, while the processing cow indicator was also back 43 per cent to 195c/kg.

In its cattle projections released this week, Meat and Livestock Australia said information collected from analysts predicted a “stabilisation in prices relative to the volatile market of 2022”.

But they also believed prices would be below longer-term averages for both the Eastern Young Cattle Indicator and for feeder steers for the rest of the year.

“Based on current rates, analyst forecasts to December 31 are for the EYCI to be 546c/kg, a 10c/kg carcass weight or a 2 per cent decline,” the analysis said.

“If this forecast eventuates, the price would be 13.5 per cent or 85c/kg lower than the 10-year average.”