Australia's beef cattle herd is expected to fall to its lowest level since 1992, according to Meat & Livestock Australia’s 2020 Cattle Industry Projections.
Drought conditions, flooding and recent bushfires have led to prompted widespread destocking and financial pressure on producers in 2019.
MLA senior market analyst Adam Cheetham said the national herd was forecast to decline 5.8 per cent year-on-year by the end of June 2020, to 24.7 million head, representing a cumulative fall of 12.4 per cent since June 2018.
“From a cattle supply perspective, numbers over the next two years are expected to tighten considerably,” Mr Cheetham said.
“The extent of tightening will be determined by domestic and global influences, with rainfall and demand from China the stand out variables.
“Adult cattle slaughter in 2020 is currently forecast to fall 15 per cent to 7.2 million head, with an expected tightening of supply as the year progresses.
“Production is forecast to be down 13 per cent to 2.1 million tonnes carcase weight.
“However, carcase weights are expected to increase by three per cent to average 292 kg/head as a result of an anticipated increase in the grainfed portion of turnoff combined with a lower percentage of female slaughter.”
Mr Cheetham said despite all of the pressures on producers, global demand for beef has remained robust and helped support cattle prices during these extreme conditions.
“The global protein market experienced an exceptional year in 2019, with the impact of African Swine Fever in China creating a significant protein deficit and reshaping the global meat trade as more product was directed to the China market,” Mr Cheetham said.
“Australian beef exports were very much part of this shift, with exports to China growing 85 per cent and the market emerging as Australia’s largest market by volume.”