Live cattle exports are tracking well above year-ago levels for 2024 so far, with Indonesian trade picking up considerably after a slow start to the year. Australia’s ample supply and lower domestic cattle prices have made for positive trading conditions so far this year.
While May and June are
historically the largest months of the year, July was the first month of this
year that achieved above-average trade. Indonesian demand has been the
standout, with that market making up 65% of the trade for the year-to-date,
compared to a five-year average of 35% market share for the same period.
July saw 76,545 head
exported, which was nearly 5% above the five-year average for the month. A vast
majority of those were headed to Indonesia, which imported about 52% more
Australian cattle for the month than they did in July 2023, and 25% above the average.
The other major market for July was Vietnam, which took about 15,000 head,
double the month prior. However, this was still less than both year-ago and
five-year average levels.
So far for the year to
July, live export numbers are sitting at 17% higher than they were for the same
period last year. Again, Indonesia has been the driver of this, with cattle
numbers 30% above the same seven months in 2023. This is on the back of the
first two months of the year being much lower than usual, with monthly exports
to Indonesia sitting between 30% and 90% higher than the five-year averages
since March.
Vietnam has remained the
next biggest market ahead of China for Australia’s live cattle, taking 10% more
year-on-year for January to July. However, numbers for Vietnam are still more
than 30% below the five-year average, and their market share is currently
coming in below where it was this time last year – and still well shy of the
22% and above it was sitting at pre-2022. Vietnam historically pushes back when
prices increase, leaning on their less legitimate import routes, meaning the
increase in Australia’s domestic cattle price in the past month could put some
pressure on this trade.
Trade with China, while
slightly stronger year-on-year, remains lacklustre, and about 10,000 head below
the usual numbers having been sent there for the first seven months of the
year. Reports are that the lack of demand for dairy cattle and southern breeding
stock has meant no new deals being done in this market, and that is unlikely to
change in the short term.
What does it mean?
The live cattle export trade looks positive as it currently stands, with good increases in prices in recent weeks and above-average numbers being loaded. While this rise in local cattle prices and the usual drying off of conditions in the north could halt much further upside for the remainder of the year in terms of the number of cattle being exported, there is also no indication there will be downward pressure either. The heavy reliance on Indonesia is something to keep an eye on.
Key Points
- Live cattle exports have been tracking above year-ago levels since March, with July recording the highest numbers for that month since 2019.
- Year-to-date live cattle exports still sit 15% below the five-year average.
- Importance of the Indonesian market continues to grow as they make up 65% of destination share so far this year.
Click on figure to expand
Click on figure to expand
Data sources: DAFF, Nutrien, Mecardo
