The national herd is expected to decline 7.7 per cent to 25.2million head in the year to June 2019, driven by elevated drought-induced turnoff, lower branding rates and estimated stock losses from the Queensland flood event.
MLA’s market intelligence manager Scott Tolmie said forecast adult slaughter for 2019 had been revised slightly higher, but was still expected to be below 2018 levels at 7.7million head.
‘‘The revision is largely driven by harsher-than-expected seasonal conditions during the first quarter and subsequent accelerated slaughter,’’ Mr Tolmie said.
‘‘For the year to February, adult cattle slaughter was 1.28million head, 11 per cent higher than the same period in 2018 and the highest opening kill since 2015.’’
However, this is overshadowed by the current elevated drought-induced turnoff with the poor conditions set to persist across many parts of the country and the latest Bureau of Meteorology forecast showing no strong indication of significant immediate relief.
‘‘With a reduced pool of available slaughter cattle, any widespread autumn and winter falls will be pivotal to how slaughter tracks in the second half of the year.’’
Mr Tolmie said the female portion of total adult cattle slaughter had remained elevated this year, reaching 54 per cent in February, its highest monthly level since June 2003.
‘‘On a 12-month rolling basis, the percentage of females in adult slaughter stands at 52 per cent — well above the 47 per cent mark typically indicating a herd in contraction,’’ Mr Tolmie said.
‘‘Feedlots have remained near capacity, but lower entry weights and the high cost of feed has impacted feeding margins.
‘‘Beef exports for 2019 have been revised marginally higher since the January projections, to 1.09million tonnes shipped weight (swt) — a three per cent contraction year-on-year but still above any level recorded prior to 2013.’’
Mr Tolmie said looking ahead at prices, strong demand fundamentals and limited supply should see continued support and stability for finished cattle prices.
‘‘While a return to more average seasonal conditions could see herd rebuilding recommence later in the year, the prolonged dry conditions will restrain the pace of any rebuild,’’ he said.
‘‘Furthermore, the run of poor seasons since 2012 may have left farm finances drained. The longer the herd remains in liquidation, the sharper the expected price correction when it re-enters rebuild territory.
‘‘Even if there is a consistent string of reasonable seasons, it is expected to take a number of years before the national herd is back to its longer-term average of 28million head.’’
