Meat & Livestock Australia’s latest Cattle Industry Projections update says the growing herd will result in a high supply of both young cattle and finished weight animals to market well into 2024.
The report said stocking rates in southern Australia, particularly in NSW, were at levels well above long-term averages. Northern Australia will develop its herd rebuild on the back of a very strong wet season generally.
MLA senior market information analyst Ripley Atkinson said a continuation of female retention in northern Australia would ensure the rebuild for this region continued, while the breeding herd in southern Australia would reach levels above long-term averages this year.
“The longer-term outlook of higher supply is ensured, with the above-average marking rates continuing despite a forecast return to average or below-average seasonal conditions,” Mr Atkinson said.
“The genetic investment producers have made in building a productive, fertile breeding herd during the past three years will contribute significantly to delivering continued high supplies of young cattle into 2024.”
Beef production is forecast to strongly increase this year as a result of improvements in processing capacity so far in 2023, higher slaughter volumes and historically elevated carcase weights.
Slaughter for 2023 is forecast to reach 6.95 million head, a revision upwards of five per cent or 325,000 head on MLA’s January figures.
“Processors are continuing to manage higher supplies of slaughter weight stock and this trend is expected to continue for the remainder of the year,” Mr Atkinson said.
“So far in 2023, the cattle market has operated as it typically does throughout the first six months of the year.
“It’s not uncommon for higher turn-off of stock leading into winter to place downward pressure on price.”
As part of the report, MLA also collates price forecast information from industry analysts.
These analysts’ forecasts to the end of the year indicate a stabilisation in prices relative to the volatile market of 2022, although with forecasted levels to be below longer-term averages for both the Eastern Young Cattle Indicator and the Feeder Steer Indicator.
Based on current rates, analyst forecasts to December 31 are for the EYCI to be 546¢, a 10¢/kg carcase weight (cwt) or two per cent decline. If this forecast eventuates, the price would be 13.5 per cent or 85¢ lower than the 10-year average.
The remainder of 2023 is expected to see continued improvements in both supply of cattle and beef to market as slaughter rates increase.
“This places Australia in an enviable position to take advantage of shifts in the global marketplace, including greater market access for Australian beef, supply adjustments to key competitors and a continued strong domestic market,” Mr Atkinson said.
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