The female cattle herd is being eaten into, with high slaughter rates

The female slaughter rate is at a whopping 75 per cent in Victoria. Will the recent rain have any effect on the high rate of female turn-off?

The best rain for months across southern grazing areas won’t grow feed immediately but it should set-up a change to livestock supply going forward.

A category it should impact is female cattle, particularly the number of cows going to slaughter and the capped rates young heifers have been making.

The female slaughter ratio (FSR) has still been tracking at herd liquidation levels for some time now, the latest available data for the last week of May having the female portion of the cattle kill still trending above 50 per cent. The industry benchmark is an FSR over 47 per cent equals a shrinking herd.

While the high FSR has been linked to herd maturation and a natural turn-off of females after numbers rebuilt following the last drought, it has also been influenced by the very dry and patchy season across southern Australia.

It is evidenced by the FSR figures for each state, based on data published by Meat and Livestock Australia. The latest figures had the FSR or female component of the cattle kill in Victoria trending at an unsustainably high 74.8 per cent. In comparison in Queensland it was at just 40.8 per cent and NSW was in the middle at 59.7 per cent.

The high turn-off of females has had a few repercussions. Firstly it has kept the cow price subdued when compared to global demand for grinding beef, particularly the record prices being paid for the product in the United States.

The latest valuation for 90 chemical lean grinding beef being exported from Australia into the US is at 1046c/kg when converted into Australian dollars, not far off the all time record high of 1093c/kg set in March this year.

The big supply of cows into the slaughter chain has also soaked up kill space and arguably acted as a demand suppressant on other grades of grass finished cattle being sold.

This widespread rain, while only a start with more winter downpours needed to change the drought pattern, should start to slow down the cull of females, acknowledging that the coming weeks for producers will remain very tough as cold and wet conditions hit on the back of little feed.

The other impact from the changing season should be an improvement in demand and price for young heifers, which have been the subject of the most discounting at saleyards amid the run of dry conditions.

online artwork June 11 kelly country

The graphic on this page shows the trendline for processing cows against the price line for yearling heifers being sold to restockers.

It illustrates how young heifers have been capped near or below cow price for an extended period.

The same graphic shows the premium that developed for heifers after the last drought in 2018 to 2020 when the trendline for cows and young females was compressed, just like it is now.

While it is unlikely that such extreme premiums will develop again considering northern areas like Queensland remain well stocked with cattle, the heifer market will step away from the cull cow price line as the season improves, particularly in the south.

There was already some price movement ahead of the rain at major store sales last week, including at Mortlake where well-bred heifers sold at rates 20-60c/kg dearer, according to National Livestock Reporting Service data.

The same upward trend was evident at Dubbo in NSW where heifer weaners also lifted 20-40c/kg.