The Australian Bureau of Statistics (ABS) released its quarterly Livestock Products report last week, and the cattle industry has been setting new records. It appears improved productivity is throwing old benchmarks out the window, with high slaughter and herd growth continuing apace.
For a look at some of the records achieved by the cattle and beef industry in the September quarter, Ripley Atkinson has covered them well here (Australia’s Beef processors at capacity as slaughter resets the record books).
Long-time readers will know that we’ve been looking for increasing cattle slaughter capacity for some time, and in the September quarter, it continued to grow. Strong beef export values and a consistent strong cattle supply have encouraged processors to increase kill rates at a relatively consistent pace over the last two years.
Male cattle slaughter gives us a measure of the size of the herd. Steers are slaughtered whether producers are restocking or not, so the number of male cattle hitting processors gives us an indication of the size of the herd last year. Yes, we have the official numbers, but male cattle slaughter helps confirm the trend.
Figure 1 shows male cattle slaughter hitting its highest level since late 2014, and before that we need to go back to the late 1970s for equivalent slaughter levels. Figure 1 also shows the change on last year, with male slaughter increasing 7.8% on September last year. In 2013–14 the cattle herd was around 31.5 million head. This is a little higher than where the latest projections have the 2024 estimate.
Female cattle slaughter usually gives a guide to where the herd is headed. Figure 2 shows female cattle slaughter, along with the Female Slaughter Rate (FSR), which is the proportion of cattle slaughtered that are female. The FSR used to give a good guide of whether the herd was in liquidation or rebuild, with a number above 47% meaning the herd was in decline.
Female cattle hit 1.312 million head in September, a 13% increase on last year, and the highest level since 1977. It’s interesting to see female cattle slaughter higher than the peak of the last drought liquidation in 2019, yet prices were at historically extreme levels.
The FSR at 53% is slightly lower than June and slightly higher than September 2024. The FSR has been at or above 47% every quarter since September 2023, yet supplies appear to be showing no signs of slowing. We’ll have to wait until the herd starts declining for a new benchmark FSR.
What does it mean?
It is hugely positive for the cattle industry to have record production and likely productivity at a time of extreme prices, with the export price outlook going forward looking rosy. The risk remains drier conditions in the north, where all the herd growth has been. A run of cows coming to market, overwhelming processing capacity, has in the past seen rapid price declines.
Key Points
- Both male and female cattle slaughter hit extreme highs in the September quarter.
- Slaughter rates suggest a very strong herd, which doesn’t seem to be falling with a high FSR.
- Downside risk remains tied to seasonal conditions in the north, where all the herd growth occurred.
Click on figure to expand
Click on figure to expand
Data sources: MLA, ABS, Mecardo
