Aus cattle herd on a two speed powerglide

Nutrien Ag Solutions cattle calf.

The Australian Bureau of Statistics (ABS) Agricultural Commodities report for June 30 2021 was released on Tuesday, and it contains a huge raft of data. The data is over a year old, but it does give us some valuable insights into the direction of the herd.

Survey data collected by the ABS is collated into the Agricultural Commodities report, and the data shows land use, and stock numbers down to the Natural Resource Management Region levels.  It is worth a look for local data, but here we’re going to start with the cattle herd at a state level.

The Australian herd rebuild has been officially recognized, with the June 21 data showing the first increase in the herd in three years.  Figure 1 shows a 4% increase in the national cattle herd, with 2020 marking the low. 

The herd still has some way to go to get back to 2018, still 7% away. The peak of the last 20 years was in 2013 and is 17% away from the levels of June 21.  To get back to the 2013 herd, cattle producers would have to add a further 4.85 million head.  At the growth rate of 2020-21, this will take another five years.

With the herd rebuild often being described as two-paced, the ABS data confirms this.  Figure 2 shows the year-on-year change in the herd by state.  Queensland is by far the largest cattle state, but the variable seasons in 2020-21 saw herd growth of just 2% (figure 2).

The slow growth in the northern herd was most notable in the Northern Territory, which saw a 4% decline in its cattle herd.

NSW had the best of the seasonal conditions, posting a 15% increase in its cattle herd, driving the national numbers.  NSW had a lot of ground to make up.  The cattle herd in NSW is still 26% below the 2013 highs.

Other states saw smaller increases but also hadn’t declined as far over the previous eight years.

What does it mean?

Anecdotal and price evidence suggests the trends of 2020-21 continued in 2021-22, with further growth.  We can see from the 2021 numbers that there is plenty of herd rebuild still to come, which should continue to support prices for the coming years, in the absence of drought and Black Swan events.

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Key Points

  • The ABS Agricultural Commodities report was released on Tuesday with large amounts of data.
  • Australian cattle numbers grew in 2020-21, driven by NSW, but remain a long way off peaks
  • Continued herd growth will continue to support prices in the coming years.

 

Source: Mecardo

Data sources:  ABS, MLA, Mecardo

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