Why livestock prices could be better in 2024

A key livestock analyst is predicting a better year ahead for sheep and cattle prices.

A key livestock analyst is predicting a better year ahead as the industry comes off one of its toughest periods in years.

Global Agri Trends’ Simon Quilty said prospects for both sheep and cattle were on the up thanks to a change in seasonal conditions across many areas.

“With rain comes hope, and for many, there is now a growing belief the worst of the Australian drought is behind us,” Mr Quilty said.

“The weather experts have been talking about a dry late summer and autumn, but this rain has given the belief that any short-term dryness can be overcome with supplementary feeding and more importantly, better growing conditions are not far away.”

Beef analyst and trader Simon Quilty on a property in Greenvale Victoria. Picture: David Geraghty

For cattle, Mr Quilty said the increase in the number of states liquidating their herds, seen in September quarter figures from the Australian Bureau of Statistics, meant there was a greater need to rebuild with depleted cattle numbers.

“This is a repeat of what happened in the 2018 and 2019 drought where NSW led the liquidation but also led the recovery in the rebuild, where NSW restockers brought large volumes of female cattle interstate to speed up their own herd rebuild,” Mr Quilty said.

“I think history will repeat itself and once again NSW will drive Australia’s cattle herd rebuild; the difference is that the availability of cattle interstate is much more limited, and as a result will see cattle prices move higher as restockers fight over a smaller ‘herd pie’.”

He said higher cattle prices would be driven not only by reduced supply but a boost in processing capacity, with an additional capacity of 25,000 per week by the middle of the year.

But the caveat over sustained increase in prices will be the level of frozen meat globally, as well as lifts in demand from export markets.

For lamb and mutton, a sell off through spring of both sheep and lambs is expected to deliver higher returns for those with numbers still to sell.

“With continued liquidation of the breeding flock the lamb kill is expected to fall over the next six quarters, which points to higher prices,” Mr Quilty said.

“Australia’s mutton kill reflects the female kill as most wethers are sold as lambs, so when the mutton kill moves above two million, this reflects liquidation of the breeding flock.

“With liquidation comes less joining and fewer lambs … liquidation over the last four quarters, this will see falling lamb numbers for at least all of 2024 and at least the first half of 2025.”

Mr Quilty said there was also anecdotal evidence of some mixed farmers quitting sheep.

“This is anecdotal evidence and needs to be watched closely through the ABS changing land-use data to see if there is any validity to this trend,” he said.

“If so, this will add to the expected tightening supply going forward.”