Australian cattle numbers hit 20-year low

By Aidan Fortune contact

- Last updated on GMT

Australian cattle herds have hit record lows
Australian cattle herds have hit record lows

Related tags: Cattle

Australian cattle supplies are at their lowest level in 20 years and likely to remain tight throughout 2017, according to Meat & Livestock Australia’s (MLA) latest quarterly cattle industry update.

This has been attributed to heavy rainfall in cattle-producing regions and to back-to-back years of record adult cattle turn-off in 2014 and 2015.

Ben Thomas, MLA’s manager of market information, said: “Parts of western Queensland and NSW have experienced herd declines of up to 40% in just three years. The national herd has dropped from a peak of 29.3 million head in 2012-13, to 26.2 million head this year.”

Expectations are for the annual adult cattle slaughter to drop to 7.1 million head in 2016, down 21% year-on-year, before dropping a further 2% to 6.9 million head in 2017.

He said this decline came as a surprise, especially with eastern states adult cattle slaughter reaching record highs in 2015.

“During July 2015, the 52-week rolling average adult cattle slaughter peaked at an all-time high of 162,829 head,” he said. “This coincided with near-record live cattle exports and the consequence is eastern states cattle slaughter will soon edge below 120,000 head for the first time since 2006.

“Expectations are for the rolling average slaughter to remain below 120,000 head for the majority of 2017 – an unprecedented low level for a longer duration than at any other time in the past.”

MLA expects the abrupt slowdown in cattle slaughter will result in more calves on the ground in 2017 and higher beef production in 2018.

Although Australian cattle prices remain at record highs, Thomas said the level at which the market eventually settles in the medium-term (2018-2020) will largely be dictated by the global trade environment, currency movements and the rate at which global demand increases.

“It is unlikely that Australian cattle prices will return to pre-2013 levels, but rather establish a new level – somewhere in between existing long-term averages and the current record highs,”​ he said.

Thomas expects the decline to stop in 2018 and cattle numbers to return to normal levels. “With Australian prices moving in a different direction to those globally, it becomes likely that once Australian production does eventually increase, prices will realign with global trends.”

Related topics: Analysis, Australia, Industry & Markets, Beef

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