Meat and Livestock Australia’s latest industry projections have Australia’s beef cattle herd having reached its maturity, with numbers now back on the decline. This assumption is supported by the highest slaughter figures since 2019, and as we observed last week, the highest female slaughter rate last quarter since 2020.
The Australian Bureau of Statistics revised
their cattle herd numbers significantly in June, and these figures have now as
a general rule been adopted by MLA and used in their forecasting models – except
a 3% higher figure from 2023. In February, the last MLA projections forecast
the national beef herd to drop by 1%, or by 115,000 head, this year. That
decrease is up to 1.4% in the latest outlook, or 400,000 head, which would see
the herd land at 30.2 million. The actual figures have moved significantly
given the ABS alterations, but looking long term, MLA projects numbers to
continue to dip in the next two years, to be 6.3% lower at 28.68 million in
2026.
When it comes to slaughter, the stronger
herd numbers -and the high slaughter levels already experienced this year –
mean the forecast kill volume has also increased compared to the last outlook.
Instead of the 7.85 million head forecast in February, MLA now predicts 8.18
million head will go through processors this year, which is an increase of
about 16% on 2023. Slaughter is set to continue to rise again next year, before
slowing in 2026.
There is plenty of positivity for two
sectors in the latest outlook, the first being live cattle exports. MLA has revised their February forecast of
723,000 head to be shipped this year to 810,000 head and expects the trade to
have risen 32% by 2026. This is compared to the 20% increase they were
expecting in that time frame in the last projections. Lotfeeding is the other
standout, with a record 1.4 million head on feed in the June 2024 quarter – 32%
above the 10-year average. Higher turn-off means the grainfed percentage of
Australian beef production is actually 3% below the average at 35%, however,
this is only down to the herd numbers and will likely increase in the longer
term.
What does it mean?
The latest projections show Australia’s beef herd as having reached its peak for this cycle, meaning production will be at its strongest this year and next as cattle are turned off at higher rates. This will put a ceiling on potential price upside, especially if drier-than-average conditions prevail in the south. However, strength in the lotfeeding sector and live exports shows the demand side of the equation globally is still going strong, with the declining US herd another bolster for Australian beef – more on this next week.
Key Points
- Herd numbers to dip further year-on-year than previously predicted, as female slaughter lifts.
- A maturing herd means higher female turn-off and increased slaughter this year and next.
- Cattle on feed reach record highs and live export is expected to lift 17% this year.
Click on figure to expand
Click on figure to expand
Data sources: USDA, Nutrien, Mecardo
