Business Feature
Queensland and Northern Territory cattle herds are expected to rebuild at a slower pace than their southern counterparts.
According to Meat and Livestock Australia’s latest Australian Cattle Industry Projections, the northern Australian cattle herd is in a greater deficit than the southern part of the country.
“The extremely hot conditions during November and December are likely to have inhibited the otherwise anticipated above average branding rates in early 2017,” MLA’s market analyst Ben Thomas said.
“The hot weather may delay rebuilding of Queensland and Northern Territory cattle herds in some regions.”
MLA said it seems unlikely that the full Queensland herd will recover to pre-drought levels until 2021.
But, if above average rainfall is received it could lift northern branding rates.
“The Queensland and northern rebuild could be accelerated considerably if the regional average branding rate exceeds 70 per cent,” Mr Thomas said.
“If this does occur, it’s likely the northern herd will recover by 2019 or 2020.”
Another factor that may accelerate the herd rebuild is the period of time at which the Australian cattle market remains at levels enough to incentivise producers to concentrate on rebuilding efforts, MLA said.
“At the same time, it’s worth noting the significantly lower variation and the consistently higher average branding rates from year-to-year in southern Australia compared to the north,” Mr Thomas said.
“This will more than likely always see the southern herd deficit recover quicker than the north.”
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MLA is forecasting Australia’s national cattle numbers to grow by 3 per cent during this year, compared to the 2016 herd size. The country’s cattle herd is expected to reached 26.9 million head by the end of 2017.
“The majority of that increase is not anticipated to be realised until the second half of the year,” Mr Thomas said.
“Thereafter, and again assuming average seasonal conditions, diminishing herd growth rates are predicted through until the end of the projection period in 2021, when the herd is predicted to reach 28.5 million head, within 3 per cent of the 2013 peak.”
North Queensland and Northern Territory live export cattle are predicted to account for 10 per cent of total cattle turn-off in 2017.
According to MLA, Australian live cattle exports are currently estimated to have reached just over 1 million head for 2016, which was significantly below the 2015 level.
“Live exports were largely constrained by resistance from some markets at the current price levels, limited Australian cattle availability and restricted trading with Indonesia for two months of the year due to permit delays,” Mr Thomas said.
“Price resistance is not surprising, as light steers from Darwin to Indonesia averaged 341c/kg live weight, up 17 per cent year-on-year and 56 per cent higher than the five-year average.
“During 2017, it’s likely equally constrained supplies will continue and expectations are for a further 24 per cent drop in Australian live cattle exports in 2017.”
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Mr Thomas point out that while this seems dramatic, the number will be on par with the 2009 to 2013 average.
“This average is before the back-to-back records of 2014 and 2015, which coincided with record turn-off and much lower prices.”