Good weather drives Australian cattle herd up to 26 million
Australia’s cattle herd is on track to rise to an above-average 26 million head this year after falling to the lowest number on record in 2020.
The national herd dropped from about 26.1m head in 2019 to an all-time low of 24.6m head in 2020, following several years of drought in key cattle-producing regions across Australia.
But favourable weather conditions have been driving a national rebuild which is expected to continue into 2022 and 2023, according to Meat and Livestock Australia’s latest quarterly projections.
MLA’s November projections, released last week, have the national herd exceeding 27m head in 2022 and 28m head in 2023.
The national herd peaked in 2013 at more than 29m head.
MLA does not make projections on a State-by-State basis, but WA’s herd has remained relatively stable at about 2m head for the past five years, according to the Department of Primary Industries and Regional Development.
MLA’s promising outlook coincides with the Bureau of Meteorology’s forecast of above-average rainfall for all major cattle regions over the next three months.
Increased rainfall in northern Australia is also expected to lead to increased pasture growth which will continue to strengthen the national rebuild into next year.
“The herd rebuild has continued as positive conditions encourage producers to retain stock for breeding purposes — something that should be sustained with a positive three-month weather outlook across most of the country,” the report said.
MLA market information manager Stephen Bignell said good seasonal conditions across the eastern states and southern WA continued to support demand and confidence in the sector.
“The cattle market continues at historic highs, with restocker and feeder demand fuelling record prices at the saleyard, which is flowing along the supply chain,” he said.
“The extent of rain post-drought has resulted in slaughter being revised down to 6m head for 2021, the lowest level in 36 years.
“While carcase weights are still expected to reach record levels, they have been revised slightly down to 308kg, bringing overall production estimates to 1848 tonnes carcase weight.
Seasonal conditions started to improve in autumn 2020, and by the end of 2022, calves born since this time are expected to hit the market, which will increase the supply of cattle available.
“The rebuild is expected to continue into 2022, as the Bureau of Meteorology prediction of a La Nina will ensure that groundwater supplies are available.”
Mr Bignell said favourable harvest conditions in 2020 and 2021 had also allowed Australia a feed grain buffer should the 2022 season deteriorate.
The projections come as Australian cattle prices continue to break records, with the Eastern Young Cattle Indicator exceeding 1100¢/kg for the first time last week.
The cattle market continues at historic highs, with restocker and feeder demand fuelling record prices at the saleyard, which is flowing along the supply chain.
The EYCI hit 1102¢/kg last Wednesday after rising about 7¢/kg overnight, before easing to 1094.7¢/kg on Thursday and jumping to a new record of 1105.5¢/kg on Monday.
Despite the red-hot price — about 280¢/kg higher than the same time last year — it was still lagging behind its Western counterpart, the WYCI.
The WYCI was sitting at 1153.8¢/kg on Monday — nearly 335¢/kg higher than the same time last year — after cracking 1100¢/kg for the first time on October 21.
The WYCI climbed to an all-time high of 1187¢/kg on October 29 before dropping 100¢/kg early this month.
But it has been steadily climbing since.
“Right now, the average price for young cattle across both those Mount Barker and Muchea saleyards is nearly dead on the same at 1153¢ and 1154¢ (respectively),” Mr Bignell said on Monday.
“Restockers are paying 1177¢ on average, and they're making up about 30 per cent of all WYCI cattle.
“WA feedlotters have bought a lot throughout the year; they’ve been quite strong.
“If you look at what you can get for a feeder, that’s where the restockers are looking at making margins on those steers. Vealer steers in WA account for 49.6 per cent of all young cattle.”
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