The authoritative ABS data on the state of the Australian slaughter situation for the first quarter of 2021 is in and the verdict is that the Australian herd rebuild is officially underway, with cow retention particularly earnest in NSW and QLD. Low slaughter also indicates we may be on track for 1.1 million fewer cows being slaughtered in 2021.
The latest numbers from the Australian Bureau of Statistics (ABS) reveal that the female slaughter ratio (FSR) for Australian cattle has fallen from 48.2% in Q4-2020 to 45.5% in Q1-2021(Figure 1). The Australian FSR slipping below the level of 47% sounds the official gong that marks the beginning of a cattle herd rebuild cycle.
While the FSR is still stubbornly high in VIC, only slipping 2% to 60.7%, the ratio in NSW plunged a huge 7% to 41.2%, followed by QLD, which dipped 2% to 38.5%. Conversely, the FSR in SA jumped 7% to 49.5% and lifted 2% in WA to 56%.
If we shape the quarterly figures by their typical monthly movements we get figure 2. Normal behaviour suggests the FSR increases in March, but if this was the case, it was likely still below the 47% threshold.
The QLD female slaughter ratio is naturally lower than the other states as a result of the structure of the industry and nature of operations. The high proportion of turnoff typically emanating from feedlots, which predominantly handle steers; and import cattle from other states have provided an estimated average 1.7 million head to QLD processors annually over the last five years.
Looking at Figure 3, the proportion of QLD slaughter estimated to be traced back to feedlot animals, which are feedlot marketing’s, or turnoff, averages around 49% since 2017. The upshot is that while the QLD figure looks remarkably low, QLD’s traditional contribution to the disposal of female cattle is different due to structural differences.
Finally, we must also take into account that while the FSR is finally at the level indicative of the herd rebuild, overall slaughter is also tracking at record lows. If we consider figure 4, we can see that the raw amount of female cattle being slaughtered in 2021 have dipped to unprecedentedly low levels, at 30% below 2020, and 10 year average levels. This indicates that we may be on track for 1.1 million less cows being slaughtered in 2021 than last year. The likely retention of cows in the paddock means that our calf crop, and hence the herd, and beef production has the potential to lift substantially in the next season.
What does it mean?
The conjecture about the Australian herd rebuild is over; it’s here and it’s happening. Not only is the female slaughter ratio below the benchmark that signals a rebuild, but the actual rate of slaughter is substantially down on the prior year. This suggests that considerably fewer cows are being put into retirement from the breeding herd, and as such, the calf crop and future beef production can only grow over the next couple of years while the seasons allow.
Key Points
- An Australian FSR of 45.5% for Q1 2021 indicates that the herd is officially in rebuild.
- NSW and QLD FSR have plunged
- FSR in SA has spiked 7 percentage points, and also lifted in WA.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: ABS, Mecardo
