Australian cattle breeders are facing the effects of drought
Australian cattle producers are rebuilding their herds but the increase will be quite small, only 3%, in the adult slaughter segment, as foreseen by MLA experts. That means the total cattle production will advance to 7.4 million head in 2018. A dry season registered across many parts of Australia saw a higher than expected turn-off in the second half of 2017, temporarily halting the herd rebuilding efforts of producers in affected areas.
“This has meant many young cattle were pushed into feedlots in 2017 due to lack of decent pasture – stock that otherwise would have been finished in the paddock and come to market in 2018. If the three-month rainfall outlook from the Bureau of Meteorology comes to fruition for February to April, it is likely to see tight supplies in certain regions, particularly through the mid part of the year", predicts Scott Tolmie, MLA’s Market Intelligence Manager.
The effects of the drought are to be seen in a drop of the number of cattle on feed. "A decline towards the 850,000 to 950,000 head mark is expected, driven by higher grain prices combined with a growing gap between feeder and grain finished cattle prices", believes Tolmie.
At the same time, the global market is going to be a battlefield between Australian, American and Brazilian beef exporters as the last two are expected to increase production. "Australian beef exports will be competing in a global market with a very strong supply of beef. With the increased supply, global beef prices should come under pressure, reinforcing the need for Australia to continually position itself as a superior supplier of high-quality product", said MLA’s Market Intelligence Manager.
Australia's beef exports are expected to reach 1.04 million tonnes, a slight improvement compared to 2017, below the numbers reported in 2013-2015 but bigger than any year prior to 2013.
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