Confidence in livestock producers looking to rebuild depleted herd and flock numbers has risen due to an improvement in domestic conditions, according to Meat & Livestock Australia.
Global markets are uncertain as the economy has shrunk for the first time in nine years during the March quarter.
The Australian red meat industry has navigated a range of complex market pressures including coronavirus, African swine fever, and a US-China trade spat, and a national bushfire crisis on the back of prolonged drought.
However, a significant improvement in water and feed availability has increased domestic livestock prices to record levels.
A positive rainfall outlook has encouraged producers, despite the unpredictability of COVID-19 in Australia’s key markets.
Winter marks a low point in supply across all species, specifically the sheep and lamb market, and cattle, sheep, lamb and goat slaughter are all running below year-ago levels.
The national sheep flock has been in contraction since 2017, attributed to very high slaughter in recent years, across large areas of Australia’s major sheep producing regions.
Estimates place the national flock at 63.5 million head — its lowest level in more than a century.
The focus for sheep producers in the short-term will be on improving lamb survival rates, which should support lamb supply towards the end of the year.
In the cattle market, the impact of improved conditions is anticipated to see cattle turn-off decline to the lowest point since the mid-1990s and remain at historically low levels for the next two years.
Processors have increased livestock grid prices to maintain the flow of cattle for processing, however, limited availability and robust competition between southern and northern abattoirs has resulted in some shortened processing weeks.