Cattle Slaughter: Historic low in Australia
Cattle Slaughter

Historic low in Australia

Imago / Westend61
Above average rainfall during the Australian winter has allowed for good pasture growth.
Above average rainfall during the Australian winter has allowed for good pasture growth.

AUSTRALIA, Canberra. Cattle farmers are restocking to cope with the effects of the drought. As a result, there is a shortage of animals for export and slaughter.

In all likelihood, Australia will slaughter fewer cattle this year than at any time in the past 35 years. At least, this is the assumption of the Meat & Livestock Australia (MLA) industry association, which in April once again revised its production forecast significantly downward. Compared with 2020, which was already weak, the experts now expect slaughter volumes to fall by 811,000 animals, or 10.7%, to 6.78 million cattle. Compared to 2019, the last year of herd liquidation due to drought, that would be a drop of 2.27 million animals, or 25.1%.

Rainfall ensures feed supply

Although the expected increase in slaughter weights should mitigate some of the production decline in 2021, the bottom line is that beef production is expected to be 184,000 t, or 8.6%, lower than last year. This is because farmers are noticeably restocking their herds following above-average rainfall in the Australian winter and good pasture growth. The low point in the Australian cattle population was reached in the middle of last year after a month-long drought with 24.62 million animals; this was the lowest level in 25 years.

Since then, however, things have been on the upswing, and the MLA projects a herd size of 25.92 million head in June 2021; that would be 5.3% higher than 12 months earlier. The old herd size of around 28 million animals is expected to be reached again by 2023, unless new droughts put a spanner in the works.

The scarcity of animals to rebuild production is reflected in the authoritative Eastern Young Cattle Indicator (EYCI) price index for younger cattle weighing 200 kg or more, which broke the sound barrier of nine Australian dollars (€5.87), based on kilograms slaughtered weight, for the first time in April. Male and female yearlings have never been more expensive.

Only slow recovery in exports

The shortage of cattle is also having a noticeable impact on exports. Australia's beef exports are not expected to exceed 1.35 mill. t this year, down 180,000 t, or 11.7%, from last year, according to the forecast. Two months earlier, the MLA had estimated export supply at just over 1.5 mill t. In 2019, the tonnage of Australian beef sold internationally was still 1.8 mill. t. The outlook is similarly unfavorable for live cattle exports, which are expected to slump by a good quarter year-on-year to 750,000 head in 2021. This would also be a new low in decades.

Tight supplies, higher prices and, above all, the Corona pandemic have also pushed Australian beef consumption down. According to the industry association, average per capita consumption in 2020 slumped 2.5 kg from the previous year to 22.8 kg and is expected to fall another 0.5 kg this year. In general, the consequences of the drought, which only ended in the winter of 2020, are still expected to affect the Australian beef market in the coming years. While production and exports are expected to rebound and slightly exceed 2020 levels in 2023, there will still be a long way to go to reach 2018 or 2019 performance levels.

Source: Fleischwirtschaft.de; AgE
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