Live cattle exports have remained consistent for the majority of this year, with strengthening demand from main markets Indonesia and Vietnam making up for less breeder cattle trade with China.
Numbers to Indonesia are stronger than they
were this time last year, with very low February throughput due to delayed
import permits the main reason they are lagging behind the average. Demand is
projected to ramp up further for the last few months of the year, and prices have
increased in the past month as the wet season approaches in the north, with WA
trade reportedly already stalled due to last season’s poor wet.
Year-to-August live cattle exports are 29%
ahead of where they were at the same time in 2023, and 13% below
five-year-average for the year so far. After February recorded one of the
lowest numbers of cattle on record at nearly 65% below the five-year average
for the month, March rebounded to be the biggest month compared to the monthly
average, at about 14% above the five-year figure. The latest monthly data,
August, had 15,000 more head exported compared to the same month last year, but
at just shy of 70,000 was still slightly below average.
Reliance on Indonesia is even stronger than
in previous years, with their current market share having grown to 66%,
compared to 54% at year’s end in 2023, and 46% in 2022. The Philippines has
also increased its intake of Australian cattle, with a 3.5% market share, its
highest since 2012. For the year-to-August, it has taken more than the
total-year five-year average and is 3% above last year. Unrest in the region
has impacted trade with Israel, which took a 10% share last year, and this year
hasn’t received Australian live cattle since March. Vietnam is tracking at 13%
stronger than year-ago numbers as its economy picks back up but is 27% below
the five-year average.
Meat and Livestock Australia lifted their
2024 forecast for live cattle export in their latest industry projections,
released last month, from a predicted 723,000 head in the February edition to
810,000 head. MLA outlined a projected increase in demand from Indonesia in the
final quarter of 2024 – so from October onwards – to fill the demand for the
Eid al-Fitr festival in late March 2025, after import permits were delayed
significantly at the start of this year. On the other hand, trade with China is
predicted to decline until at least 2028 on the back of diminished demand for
Australian dairy breeding stock. That said, for the year so far China’s intake
of Australian live cattle is currently 7% up.
Numbers to Indonesia are 51% stronger
year-on-year for the January to August period, with both breeder and feeder
cattle increasing. Indonesia’s new government has announced a plan to provide
free lunches, including milk, for all school children, which could open up
further opportunities, particularly for dairy stock. On the other hand, Brazil
is also looking to enter the live dairy cattle trade with Indonesia, which
could see them also send feeder cattle – a market currently only occupied by
Australia.
What does it mean?
Current prices for feeder steers ex Darwin are $3.20, with Townsville returns at $3. The NT price is less than 30c/kg below the NSW feeder indicator, which is on the closer end of the trend of difference between the two. If the predicted increased demand from Indonesia eventuates for the final two months of the year, there is scope for this to increase further – especially if any early wet season activity restricts supply to what’s already been made available.
Key Points
- Live cattle exports numbers well above year-ago levels but are still 13% shy of the five-year average volumes.
- Indonesia picks up even more market share, taking 51% more cattle year-on-year, with demand set to increase further in the final quarter.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, Mecardo
