The national cattle herd, currently about 26 million, is predicted to shrink to its lowest levels in almost 30 years, according to Meat and Livestock Australia’s forecast.
The national cattle herd, currently about 26 million, is predicted to shrink to its lowest levels in almost 30 years, according to Meat and Livestock Australia’s forecast.

Cattle herd tipped to shrink to record low

AUSTRALIA'S national cattle herd is predicted to shrink to its smallest in almost 30 years, thanks to what Meat and Livestock Australia describes as "one of the most difficult years on record".

MLA released its 2020 Cattle Industry Projections this week, and it expects to see a year-on-year decline of 5.8 per cent in the Australian cattle herd - currently about 26 million - plus a decline in slaughter, production and exports.

"From a cattle supply perspective, numbers over the next two years are expected to tighten considerably," MLA senior market analyst Adam Cheetham said.

"Adult cattle slaughter in 2020 is currently forecast to fall 15 per cent to 7.2 million head, with an expected tightening of supply as the year progresses.

"Production is forecast to be down 13 per cent to 2.1 million tonnes carcass weight."

But the outlook is not all bad news, with carcass weights tipped to go up, to about 292kg per head.

"Carcass weights are expected to increase three per cent per head as a result of an anticipated increase in the grain-fed portion of turn-off, combined with a lower percentage of female slaughter," Mr Cheetham said.

Further growth is also predicted for the lotfeeding sector due to both consumers' demand for high quality grain fed beef, and the need for finishing cattle in drought conditions.

Globally, demand for beef is expected to remain robust, and in turn support prices.

However, the typically lucrative export market may still experience a downturn.

"The global protein market experienced an exceptional year in 2019 … as more product was directed to the China market," Mr Cheetham said.

"Exports to China grew 85 per cent and the market emerged as Australia's largest by volume.

"Demand for beef from many other key markets around the world remains robust, but buyers must now compete more fiercely for that product.

"In 2020, Australian beef exports are forecast to decline 16 per cent to 1.03 million tonnes shipped weight - one of the lowest levels in recent years, but still higher than any year before 2013."

While a little rain in parts of Australia, including southwest Queensland, has given some confidence back to those who have received it, and had some impact on cattle prices going up, the MLA report says it will take even more than these showers to have a widespread impact on cattle prices.

Should more rain promote a major improvement in seasonal conditions, there is every chance cattle prices could still find support, as restockers, feeders and processors will be competing for a reduced pool of livestock.

Young cattle and breeding stock prices will be influenced significantly by the extent of the improvement in pasture availability," Mr Cheetham said.

"Even without good rain, finished cattle prices should remain at historically high levels as a result of the strong demand fundamentals."


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