Australian cattle herd set to surge ahead of ‘best spring’ in recent memory
Australia’s national cattle herd is expected to surge to 26 million head this year — five percent above 2020 levels — the latest figures from Meat and Livestock Australia have revealed.
According to MLA’s July Australian Cattle Industry Projections, the national herd will rebuild quickly and cattle producers are expected to have “the best spring in recent memory”.
MLA market information manager Stephen Bignell said a favourable three-month weather outlook signalled a strong spring, with average adult carcase weights set to rise significantly leading to higher weight gain.
“Carcase weights have been revised 11kg higher to average 311.7kg and slaughter will remain depressed, with the 2021 volume expected to hit 6.3 million head,” Mr Bignell said.
“On the back of improved carcase weights, production has been revised higher despite slaughter declining.
“Total production is being forecast to 1.96 million tonnes cwt, highlighting Australia’s ability to maximise beef output despite low supply.”
Mr Bignell said an abundance of feed was encouraging stock retention, prompting predictions the national herd would reach 26 million head this year.
“This tight supply is being reflected in lower saleyard throughput, reinforcing that the national herd rebuild is well under way,” he said.
“Slaughter is forecast to drop this year on the back of the national herd rebuild as producers retain more stock; however, it is expected to pick up slightly towards the end of the year as more cattle come off feed.”
According to MLA, rain events remain the key indicator of market performance in relation to price.
Total production is being forecast to 1.96 million tonnes carcase weight, highlighting Australia’s ability to maximise beef output despite low supply.
On July 23, the Eastern Young Cattle Indicator surged past the 1000¢/kg mark to a record 1003.44¢/kg – a price many analysts never thought they would never see.
The EYCI this week dropped below the 1000¢/kg mark to 988¢/kg, yet that figure is still 235¢/kg higher than the same time last year.
“The industry EYCI price predictor has the EYCI sitting at 874¢c/kg at the end of 2021,” Mr Bignell said.
“In line with the astronomical lift in young cattle prices seen last week, the National Medium Cow Indicator has risen 40¢ year-on-year, or 13 per cent, to sit at 308¢, with the National Heavy Steer Indicator up 100¢, or 16 per cent, to sit at 412¢c/kg lwt.”
He said demand for Australian beef would likely also improve as economies around the world continued to recover from COVID-19.
“COVID-19 continues to disrupt beef trade and sales in many Asia-Pacific nations, however economic growth rates are forecast to gradually lift, maintained by improved vaccination rates in developed markets and improved consumer sentiment supporting beef consumption and import demand,” Mr Bignell said.
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