Outlook Australian 2019 beef cattle seasonal outlook

by Editor fleischwirtschaft.com
Thursday, April 25, 2019
Rabobank-modelled cattle prices for 2019 are lower than 2018 prices, but rain will drive much bigger price swings than we have seen in the past.
Photo: pixabay/Holgi
Rabobank-modelled cattle prices for 2019 are lower than 2018 prices, but rain will drive much bigger price swings than we have seen in the past.
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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.

Rabobank expects slaughter numbers to contract slightly in 2019, a result of limited inventory and also a slight improvement in the season that will mean fewer forced sales. Assuming rainfall is still below average, females will still make up a large component of the total and, together with lighter cattle generally, this will keep slaughter weights down. We therefore expect production to drop by 6%.

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. 

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