THE NETHERLANDS, Utrecht. The level of destocking that has occurred over the last five years means that Australia’s cattle herd is at its lowest point in 20 years. This limited 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.
Producers, along with feedlots and processors, will be forced to compete for a very limited pool of cattle, and we expect prices to move substantially as producers – motivated by rain – enter and leave the market.
With assumed drier-than-normal conditions across the year, demand from producers to restock is expected to remain subdued and, therefore, average prices across the year will decline. Inventory limitations will mean prices swing, with upside generated by any improvements in the season.