Rain fuels producers’ potential to rebuild cattle herd

MLA senior market analyst Adam Cheetham said for the first time since 2017, many producers were now in a position to consider rebuilding depleted herds.

“From a cattle supply perspective, the impact of improved conditions on producer intentions is anticipated to see cattle turnoff decline to the lowest point since the mid-1990s and remain at historically low levels for the next two years,” Mr Cheetham said.

“The flow-on effect of a sharp contraction in adult cattle slaughter has seen a decline of 16 per cent in the national beef production forecast to 2.05 million tonnes carcase weight, with increasing carcase weights only offsetting some of the decline in slaughter.

“National adult carcase weights are forecast to lift 10.4 kg to average 294 kg/head in 2020, driven by an improvement in feed, lower stocking rates and easing percentage of female slaughter.

“Intense competition for store cattle will challenge the lot feeding sector and the number of cattle on feed is anticipated to ease, limiting the upside potential for average carcase weight gains.”

Looking at exports amid COVID-19, Mr Cheetham said beef exports were forecast to reach 990 000 tonnes shipped weight — back 20 per cent on last year.

“The COVID-19 global disruption outside of China, which intensified in March, will likely lead to some significant shifts in coming months,” Mr Cheetham said.

“The impact of COVID-19 on each country's red meat market will be shaped by many factors including its dependence on imports, level of disposable income, the prominence of red meat in consumer diets, as well as many evolving factors, such as the level of restrictions imposed by governments.

“The impact on the meat industry from COVID-19 is impossible to predict, but is likely to include an Australian and global economic downturn, a significant reduction in foodservice demand and reduced demand for higher value meat cuts.”