The United States Department of Agriculture’s Foreign Ag Service (USDA FAS) has released its annual report on Australia’s livestock and beef outlook. The report predicts that in 2024, Australia’s beef production could achieve the sixth highest volume ever recorded, amounting to 2.25 million tonnes.
Additionally, beef exports are anticipated to attain the fourth highest level in history.
The report indicates that after a robust cattle herd rebuild since 2020, Australia’s beef production has reached a pivotal moment this year. Beef production in the first half of the year surged by 15% year-on-year to 1.05 million tonnes.
The entire 2023 production is estimated to rise by 16% to 2.17 million tonnes. Beef exports for 2023 are projected to hit 1.53 million tonnes, marking a 23% increase from 2022. This growth suggests Australia is poised to reclaim some of its market share in major Asian markets.
For 2024, the FAS expects Australia’s beef exports to grow by another 5%, reaching 1.6 million tonnes. This growth is noteworthy, especially considering the peak in exports during the drought year of 2015, which stood at 1.77 million tonnes.
The report also touches upon the current conditions in Australia. With the onset of drier conditions and an increase in beef supply in 2023, cattle prices have seen a decline of over 40% since the end of 2022. Retail beef prices have also started to decrease in the latter half of 2023, a trend expected to persist into 2024.
Factors such as the Bureau of Meteorology’s forecast of below-average rainfall for September to November 2023 could negatively impact cattle production, especially in southern temperate areas.
These regions rely on spring rainfalls for grass feed, which sustains cattle through summer and into autumn 2024.
A lack of grass feed might lead to an increase in cattle sent to feedlots, thereby affecting the cattle slaughter numbers for the last quarter of 2023 and the growth for 2024.
The FAS report also highlights challenges faced by processors, such as labour shortages, which limit their capacity. However, there are indications that more processing capacity might become available in 2024, aligning with the forecasted increase in cattle slaughter numbers.
For 2024, the FAS anticipates a rise in overall slaughter numbers, but a slight decrease in the proportion of feedlot cattle. The average carcass weight for Australian adult cattle is expected to drop to 314 kg in 2024, down from an estimated 317 kg in 2023.
On the domestic front, a minor increase in Australian beef consumption is forecasted for 2024, reaching 675,000 tonnes. This rise is attributed to the anticipated decline in retail beef prices in late 2023 and 2024, making beef more competitive compared to other meat proteins.
Lastly, the report mentions the US livestock industry’s shift towards a national herd rebuild phase, leading to an 11% decline in US beef exports in the first half of 2023.
Given the major beef export destinations shared by the US and Australia, such as South Korea, Japan, and China, Australia is well-positioned to regain market share from the US.
