Meat & Livestock News

Australian Beef Herd Nears Official Reduction Phase, Reveals Latest ABS Data

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The Australian beef industry is on the cusp of entering an ‘official’ herd reduction phase, as indicated by the latest quarterly data from the Australian Bureau of Statistics (ABS) on livestock slaughter and meat production volumes.

The data, which covers up to 30 September, provides insights into the Female Slaughter Ratio (FSR) for cattle, a key metric for understanding the dynamics of the national beef herd.

Historically, an annual FSR above 47 percent signals that Australia’s national beef herd is in a liquidation phase, while a figure below this threshold suggests a rebuilding phase.

The September quarterly FSR stood at 49 per cent, a slight increase from 48 per cent in June. This places the annual average FSR for 2023 at 46.7 per cent, narrowly missing the mark that would indicate the start of a herd liquidation phase.

Meat & Livestock Australia (MLA) has previously suggested that similar to economic measures of recession, two consecutive quarters of an FSR above 47 per cent could be considered the ‘official’ start of a herd decline.

Despite many anticipating this threshold to be reached in the September quarter, the current figures suggest only a mild herd reduction is occurring. It’s important to note, however, that FSR figures vary dramatically between Australian states, indicating different rates of herd expansion or contraction.

National slaughter data compiled by the National Livestock Reporting Service, which includes contributions from approximately 80-85 per cent of the national kill, indicates that there have been only a few weeks this year when the FSR reached or exceeded 47 per cent.

During the 2019 drought, the beef herd experienced a record-high FSR of 56 per cent.  MLA has also forecasted a 4 percent increase in the national herd over the calendar year 2023.

However, Dalgleish pointed out that an annual average FSR closer to 47 per cent would typically align with only marginal herd growth, around 1 per cent or less. He added that if the FSR continues to trend higher, MLA might revise its growth projections for the herd this year.

In addition, the latest quarterly cattle on-feed survey for the quarter ending 30 September provided insights into the proportion of grain-fed cattle being turned off this year.

The September quarter saw a decrease in grain-fed turnoff, resulting in the grain-fed ratio (as a proportion of all beef produced) dropping from an annual average of 46.9 per cent in 2022 to 38 per cent so far in 2023, the lowest level since the 2019 drought. The total number of adult cattle processed in Australia up to September 2023 was 5.18 million head, of which 1.97 million were grain-fed and 3.21 million were grass-finished.

This data highlights the dynamic nature of the Australian beef industry and the importance of closely monitoring trends such as the FSR and grain-fed ratios to understand the evolving landscape of cattle farming in the country.