Australia's cattle herd rebuild is on the horizon despite COVID-19 disruptions, according to Meat & Livestock Australia’s Cattle Industry Projections July update.
MLA senior market analyst Adam Cheetham said renewed optimism swept the domestic cattle market on the back of an excellent autumn break for many southern cattle producing regions.
“From a cattle supply perspective, a contraction in the availability of livestock has occurred, however, robust live export shipments and only a modest contraction in processor throughput for the year-to-May has resulted in a slight revision higher for cattle turnoff since the April projections update,” Mr Cheetham said.
“Total adult cattle slaughter is now forecast to drop to seven million head, down 17 per cent compared to 2019 levels.
“On the back of a sharp decline in cattle turnoff, national beef production is forecast to decline by 14 per cent to 2.06 million tonnes carcase weight.”
“Limited supply availability, in particular throughout winter, exacerbated by intense restocker activity in the store market and heightened stock retention, is expected to see national beef production track well below 2019 levels for the remainder of the year.”
Mr Cheetham said a lift in average carcase weights, fuelled by improved seasonal conditions, would help to offset some of the decline in slaughter.
“Average adult carcase weights for 2020 are forecast to reach 294 kg/head, an increase of four per cent on 2019, with male and female carcase weights projected to increase by three kilograms and eight kilograms, respectively.
“Greater feed availability, low stocking rates and historically high cattle prices should all combine to place producers in a position to feed for longer and to finish to heavier weights along with a growing portion of males in the total kill.”
Cattle prices have started to soften and once spring hits, prices will likely come under further downward pressure.
“On the back of an excellent autumn break for many southern cattle producers, opportunities to restock paddocks has emerged and this has been reflected in the number of cattle heading south,” Mr Cheetham said.
He said the start of the herd rebuild was predicted to occur towards the end of 2020, as high female slaughter rates were expected to decline.
“The Australian cattle herd is now expected to increase by 1.9 per cent in the year to June 30, 2021, climbing back to 25 million head.”