Australian cattle slaughter forecast at 35-year low

Australia's cattle herd is projected to increase by 5% to 25.9 million, close to its size in 2019 before the drought-driven large-scale drawdown began.

MLA Market Information Manager Stephen Bignell said significant rainfall in northern Australia during the summer has resulted in sufficient grassland sprouting for the coming dry season, boosting producer confidence and leading to record high livestock prices.

“More than expected rainfall has resulted in ample grazing ahead of the dry season and prompted northern producers in particular to expand their cattle herds, pushing up livestock prices even more,” Mr. Bignell said.

“Summer rainfall encouraged producers to purchase as many cattle as possible before the start of the dry season in the north, causing the Eastern European Young Cattle Indicator (ECYI) to break the 900 cents/kg barrier for the first time in history. Carcass weight is expected to increase by 3% this year as growers and feedlots take advantage of pasture abundance and cheaper forage resulting in weight gain. As producers seek to conserve cattle and take advantage of improved seasonal conditions, cattle slaughter is expected to fall by 11% from 7.2 million head in 2020 to 6.4 million head in 2021,” he added.

Mr. Bignell said the drop in beef slaughter and production will weigh on exports, but demand for Australian beef remains strong. “Exports are expected to fall by 12% to 1,350,000 tons, but the decline in exports is the result of a reduction in the supply of cattle and is not related to demand. Demand for Australian beef remains strong, as evidenced by the price buyers pay for it," Mr. Bignell said.

Australia's live juice exports are forecast to fall by 26% this calendar year to 750,000 heads, but livestock exports are forecast to rise by 27% to 950,000 head by 2023 on increased supply, lower prices and economic recovery of key trading partners from the pandemic COVID-19.