Australia's cattle herd rebuild process is about to slow down
Meat and Livestock Australia's latest forecast on cattle slaughter show that the process of herd rebuilding is taking a downturn due to the challenging weather condition that has forced the producers to sacrifice a higher number of animals.
7.48 million cattle head are to be slaughtered this year, according to MLA’s Market Intelligence Manager, Scott Tolmie, who is blaming the drought for this situation.
"The first quarter has seen both male and female slaughter running well above 2017 levels and combined with the largely neutral weather outlook, has led to a slight upward revision in the annual slaughter forecasts, up 4% year-on-year", he said.
Also, the Eastern Young Cattle Indicator (EYCI) has come down to the lowest level in three years putting down the expectations for a strong herd rebuild process in the following months.
"Seasonal conditions for the remainder of autumn and into winter this year will dictate the availability of young cattle and how fierce the competition will be among different buyers", mentioned Mr Tolmie.
The finished beef market is expected to be under pressure this year, partly due to the increase in the slaughtering of Australian cattle, part due to the supply surge in other beef producing countries such as the United States and some South American Nation.
"US beef production is on course to exceed 12.5 million tonnes in 2018 according to the latest United States Department of Agriculture (USDA) projections. This figure represents a 5% production increase compared to last year.Beef production and consumption levels in the United States will need to be closely monitored, with a significant lift in grain-fed cattle kills expected in coming months, which is likely to flow through to increased competition in our key export markets", concluded Scott Tolmie.
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