Cattle exports to finish 2016 lower

After two consecutive years of back-to-back record live cattle exports, 2016 has witnessed a significant decline in shipments, underpinned by tight supplies, high prices and emerging in-market challenges. Nevertheless, slaughter and feeder cattle exports will come close to one million head this year and will mark the third highest annual total in the past decade.

On a twelve month rolling total (year ending November), feeder and slaughter cattle exports have declined to most markets, with total numbers back 23% year-on-year, at almost 986,000 head (ABS, DAWR). As highlighted in the recently released December edition of LiveLink:

• Feeder and slaughter cattle exports to Indonesia have declined 13% over the past twelve months, to 573,000 head – accounting for around 58% of total exports
• Exports to Vietnam declined 42%, to 204,000 head
• Numbers to Israel declined 28%, to 65,000 head
• Turkey has re-emerged as a major market, particularly in recent months, with numbers increasing seventeen-fold over the past year, to 41,000 head

There were limited slaughter and no feeder cattle exported to China, with just two air freight consignments recorded in 2016, up from the single consignment in 2015. The price of cattle in Australia throughout 2016 has resulted in a lack of incentive for importers in China to develop the trade. There has been a slow down in the development of supply chains for Australian cattle due to high prices and restrictive protocol conditions.

Breeder cattle exports, 80% of which were destined for China, have tracked more-or-less steady over the past twelve months, at just over 113,000 head. Close to 4,000 breeders were also shipped to Indonesia in November, primarily as part of the government breeding program in North Sumatra, however significant numbers have yet to be recorded as a result of the Indonesian government’s 5:1 (one breeder for every five feeder cattle imports) import policy which began in late October.

Tight supplies are likely to remain a theme in 2017 however cattle prices may ease from the peaks of the past twelve months as the Australian market realigns with global levels. The prospect of an 800,000 head export year appears more likely than the recent highs, as the northern Australian cattle herd again looks to rebuild.