Dry east coast shrinks herd
Australia’s cattle herd is expected to fall to its lowest levels in more than 20 years as farmers grapple with repercussions from the Eastern States’ persistent dry conditions, latest industry findings reveal.
Meat and Livestock Australia’s cattle industry projections, released last Tuesday, forecast the national herd to drop 3.8 per cent to 26.2 million head by June 30 — the lowest it’s been since 1997.
The report also signalled mounting industry competition from the US and South American markets.
MLA market intelligence manager Scott Tolmie said the dry weather which hampered NSW and South West Queensland had impeded bids to rebuild herd stocks after the 2013-15 drought.
“A significant turnaround in conditions is needed before rebuilding can recommence,” he said. “Compared to last year, many producers have entered 2019 with depleted feed stockpiles and require a turn-around in seasonal conditions to avoid mounting feed costs.
“Carcase weights are expected to drop to an average 289kg/head this year as the female kill remains elevated and the ability and cost to finish cattle remains challenging.
“The number of cattle on feed is expected to ease from the record levels reached in 2018 to around one million head, on average, in 2019.”
The document predicted national slaughter to decrease 3 per cent year-on-year to 7.6 million head alongside the shrinking herd.
However, the study did not forecast slaughter to fall to the levels experienced in the two years after emerging from the 2015 drought, which surprised Mecardo analyst Angus Brown.
“Interestingly MLA don’t expect slaughter to fall to the levels seen in 2016 and 2017,” he said.
“The extreme low slaughter in those years was helped by bumper seasons and resulted in herd growth of 4 per cent in 2017.
“It’s hard to see the herd achieving the forecast growth rates of 3 per cent and 2.6 per cent in 2021 and 2022 without a stronger decline in slaughter.”
MLA also found global demand for Australian beef market remained positive, after the country’s beef exports totalled 1.13 million tonnes shipped weight at the end of last year.
It marked the third-biggest shipping year on record and the sixth consecutive year exceeding one million tonnes amid increasing Chinese demand.
Despite the positive 12 months, beef exports are expected to follow production and decline 6 per cent year-on-year and reduce to 1.06 million tonnes shipped this year.
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