Summer rains impact cattle slaughter

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The quarterly Australian Bureau of Statistics (ABS) Livestock Products report was released last week. Livestock Products is where we get our official slaughter numbers for the quarter, and despite the quarter finishing six weeks ago, it’s worth a look.

March is traditionally the weakest slaughter quarter of the year, with a slow start and public holidays limiting the number of kill days.  This year is no different, with slaughter down 2% on December. The ABS seasonally adjusted numbers suggest the trend is still up, and this is no surprise given where we sit in the herd cycle.

Compared to March last year, cattle slaughter was much stronger, up 17% and hitting the highest March level since 2020. We can see in figure 1 that slaughter is still well behind the 2 million head plus liquidations of 2019-2020 and 2014-15.

Breaking cattle slaughter down into male and female gives better insight into where the herd is situated.  As almost all male cattle are slaughtered within three years of being dropped, the slaughter rate is a good indicator of the size of the herd.  Female slaughter is the go to for producer intentions and where the herd is headed.

Figure 2 shows male cattle slaughter for March was up 8% on last year, and posted it’s second year of growth in a row.  Male cattle slaughter was at it’s strongest level since 2016, but still below the highs of 2012-2016.  This tells us the herd is at a seven or eight year high, but hasn’t recovered the ground lost during the dry years.

Female cattle slaughter for March was up a massive 30% on this time last year, but it’s coming from extreme lows. March female slaughter was up only 8% on the five year average, thanks to the liquidation years of 2019 and 2020 bumping up the average.      

Figure 3 shows female slaughter, and the female slaughter rate (FSR), which is the proportion of females in total slaughter. We can see that despite the strong year on year increase, the FSR dipped in March, back to 47%. 

The 47% level is the tipping point between herd rebuild and liquidation. As such the March figure suggests that after two quarters of liquidation, the good summer rains in the north might have seen producers move back towards a steady herd.

What does it mean?

Better conditions in key cattle areas, and improving prices, seem to have strengthened the resolve of the cattle sector. The herd growth of recent years will see cattle slaughter maintain it’s strength in 2024 and 2025, which will keep a lid on price.

The cattle market appears to be back in a bottleneck situation, where increased slaughter capacity is required to allow strong export values to be reflected in saleyard values.

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Key Points

  • ABS released March quarter slaughter figures.
  • Male and Female slaughter rates Year on Year vary greatly.
  • Female slaughter rate points to herd stabilization.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources: ABS, MLA, Mecardo

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