Ongoing drought and a poor rainfall outlook has seen 2018 Australian beef production forecast to finish six per cent up on 2017 at 2.3million tonnes carcase weight.
That is according to Meat & Livestock Australia’s Cattle Industry Projections October update, which said the increase was because of elevated levels of adult cattle slaughter throughout winter and early spring.
Australia’s national adult cattle slaughter for 2018 is expected to reach 7.8million head, nine per cent higher than 2017.
MLA’s market intelligence manager Scott Tolmie said while October brought useful, though not drought-breaking, rain to parts of the eastern states and restored some confidence to the store cattle market, widespread follow-up rain is needed for any lasting benefit to pastures and crops.
‘‘Despite poor prospects for pastures entering into 2019, slaughter numbers will begin to be constrained by a shrinking pool of available cattle,’’ Mr Tolmie said.
‘‘The female slaughter rate has risen to levels not seen since the last drought in 2015, though notably, this time off a lower base herd, which will have repercussions for cattle supply and production in coming years.
‘‘Typically, the Australian cattle herd contracts when the proportion of female slaughter exceeds 47 per cent of total slaughter — a threshold first surpassed in May.’’
Mr Tolmie said the start of the northern wet season marked a pivotal time, especially this year.
‘‘In 2018, the Eastern Young Cattle Indicator has traded at a discount to the finished market since April, as worsening seasonal conditions deter restocker buyers,’’ he said.
‘‘More recently, rainfall in some key eastern production regions saw the EYCI break through the 510¢/kg carcase weight mark on October 17.’’
Looking forward, follow-up rain could see demand for young cattle spike, particularly females.
‘‘However, the continuation of dry conditions or just ‘one-off’ rainfall events would likely see another wave of destocking, especially in the north, placing further downward pressure on prices,’’ Mr Tolmie said.