Low herd numbers influence beef outlook

Australia's low cattle herd numbers influence 2019 beef outlook

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Low cattle numbers mean Australia's beef market will be heavily influenced by seasonal conditions.

Low cattle numbers mean Australia's beef market will be heavily influenced by seasonal conditions.

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A new industry report says that Australia's low cattle numbers mean that seasonal conditions could bring significant market changes if it rains.

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A new industry report says that Australia's low cattle numbers mean that seasonal conditions could bring sweeping price increases.

Australian 2019 Beef Cattle Seasonal Outlook report author, Rabobank senior animal proteins analyst Angus Gidley-Baird said limited cattle inventory will make the market very sensitive to any changes in demand and exaggerate any price upside as a result of increased rain and better conditions across the country.

"Any meaningful rain, particularly in Queensland and New South Wales, would see beef producers - in addition to feedlots and processors - jump back into the market to buy cattle from what is a very limited pool," he said.

"This could see prices rise by more than 20 per cent." However, should the season remain drier than normal, Mr Gidley-Baird said prices would ease and remain below 2018 levels.

Australian cattle slaughter numbers are forecast to contract by 5% in 2019 assuming drier than average seasonal conditions.

Seasonal conditions in Queensland and NSW are expected to have the greatest bearing on the domestic cattle outlook, as producers potentially offload more stock throughout 2019.

Mr Gidley-Baird said the drop in production has been compounded by the Queensland floods - affecting a vast area accounting for approximately 17 per cent of the Queensland herd (around one million head).

"While the precise numbers of stock lost will not be known until musters are completed, there is the real possibility for losses to amount to 500,000 head," he says.

"In the northern areas of the flood zone, which is generally considered breeding country, the loss of breeding cattle will have a bearing on calf production not only this year, but in years to come.

"While in the southern areas - representing more growing and fattening - will see a reduction in the number of finished cattle available for slaughter over the next 12 months."

The story Low herd numbers influence beef outlook first appeared on Queensland Country Life.

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