TL;DR:
- The Australian cattle herd is projected to decrease slightly to 28.6 million by mid-2024, following three years of growth.
- Female retention rates remain high, indicating a shift to a maintenance phase despite increased turnoff rates.
- Global beef market dynamics, influenced by the United States’ herd rebuild and Australian productivity improvements, are expected to drive demand for Australian beef.
As of 27 February 2024, the Australian cattle industry is poised for a slight adjustment, with the national herd expected to decrease by less than 1% to 28.6 million head by 30 June 2024. This forecast comes after a period of significant growth, culminating in the largest cattle herd seen in a decade by 2023, according to Meat & Livestock Australia’s (MLA) latest Cattle Industry Projections.
The current phase of the Australian cattle herd reflects a strategic shift towards maintenance, underpinned by a continued high rate of female retention, especially in northern production systems. This trend suggests that the elevated turnoff observed is more a result of high supply rather than a deliberate move by producers to reduce stock numbers.
Stephen Bignell, Manager of Market Information at MLA, notes that the resilience of the northern Australian cattle herd is partly due to favourable weather conditions, including consistent rainfall from cyclones and low-pressure systems. In contrast, the southern herd is expected to contract further as it reaches maturity, leading to increased turnoff as the industry enters a herd maintenance phase.
The focus on productivity and genetic improvement during the 2020-22 rebuild phase has fortified the Australian cattle breeding herd, making it more resilient to higher turnoff rates. This resilience is expected to sustain a solid number of young cattle in both northern and southern systems in the coming seasons.
MLA anticipates an increase in slaughter rates, potentially driving production to near-record levels by 2025. However, the availability of labour for processors remains a challenge, particularly as the number of cattle ready for processing grows.
Despite this, carcass weights are expected to remain above long-term averages, benefiting from ongoing investments in genetics and the feedlot sector.
The global beef market continues to evolve, with the United States and Brazil as key competitors for Australia. The forecasted easing of drought conditions in the US suggests a significant herd rebuild, which could tighten American supply and enhance the demand for Australian beef in international markets. Additionally, a stable domestic supply is likely to support robust demand for live cattle exports.
Weather events have played a significant role in shaping the industry, with an El Niño event and a positive Indian Ocean Dipole (IOD) declared in the previous year. Looking ahead, Australia is expected to experience a neutral IOD and potentially exit the El Niño phase by May, with varied forecasts for a La Niña event in 2024.
The year 2024 is shaping up to be a pivotal one for the Australian cattle industry, with the herd entering a maintenance phase amidst relatively stable climate conditions. This stability is crucial for business management and strategic planning, offering a less reactive environment compared to the volatile markets of 2023.
