Drought takes its toll on national beef herd

By Country News

Australia’s national beef cattle herd is expected to fall to its lowest level since the mid-1990s, as ongoing dry conditions persist across many key cattle production areas.

The Meat & Livestock Australia 2019 Cattle Industry Projections forecasts cattle slaughter will drop three per cent to 7.6million head this year, as the breeding herd and potential pool of available finished cattle continues to drop.

Total beef production is expected to decline by four per cent as a result, with drought conditions across NSW and south-west Queensland taking its toll.

MLA market intelligence manager Scott Tolmie said drought conditions had undone much of the herd rebuild achieved since the 2013 to 2015 drought.

‘‘As a result of elevated slaughter and substantially lower than usual branding rates, particularly across Queensland and NSW, the national herd is expected to decrease a further 3.8 per cent to 26.2million head by mid-2019,’’ Mr Tolmie said.

‘‘A significant turnaround in conditions is needed before rebuilding can recommence.

‘‘The prospect of another below average northern wet season and a largely negative three-month rainfall outlook will likely mean many producers that retained stock in 2018 will continue or commence destocking in the months ahead.

‘‘Compared to last year, many producers have entered 2019 with depleted feed stockpiles and require a turnaround in seasonal conditions to avoid mounting feed costs.’’

Carcase weights are also 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,’’ Mr Tolmie said.

He said any further destocking would see downward pressure on cattle prices, particularly for store condition cattle, yet finished cattle would be supported to some degree as a result of the tight supply of quality slaughter cattle.

‘‘If there is a major improvement in seasonal conditions across eastern Australia, supplies will tighten sharply and fierce restocker competition may re-emerge, as was the case in 2016.

‘‘Seasonal conditions will most likely have the strongest impact on domestic cattle prices, however, exchange rates, production in the United States and South America, market access developments and demand from China will all play an important part.

‘‘Total Australian beef exports are forecast to follow production and decline six per cent year-on-year, to 1.06million tonnes swt in 2019.’’