MLA cattle industry projections – July 2016 update

The July update to MLA’s 2016 cattle projections was released on Monday, with slight revisions to Australian cattle slaughter and beef production for 2016 and 2017, and indicators pointing to the beginning of a national herd rebuild.

Slaughter cattle availability for the remainder of the year is expected to tighten slightly more than predicted in January, with the 2016 forecast revised down to 7.4 million head, a fall of 18% from 2015 (7.6 million head was predicted in January). The lower proportion of female cattle slaughter indicates the commencement of national herd rebuilding. The latest data indicates that the rolling 12 month average female proportion of the adult kill was only 48.6%, down from the peak of 50.6% during 2015. Female slaughter, as a proportion of the national kill, is likely to continue drifting down to below 44% as full rebuilding takes place.

The Eastern Young Cattle Indicator (EYCI) has continued its record breaking run, averaging 618¢/kg cwt in June, up 123¢/kg cwt or 25% from year-ago levels – on the back of 'above average' to 'very much above average' rainfall across large swathes of Queensland, NSW and central Australia in late May and June. In particular, the recent rain-fuelled confidence amongst restockers led the price charge. Of the EYCI-eligible cattle in recent weeks, restockers purchased 39% of them and paid, on average, 675¢/kg cwt (or a 16¢/kg cwt premium to the EYCI). In comparison, feedlots purchased 41% of the total and paid 661¢/kg cwt (2¢/kg cwt premium), while processors purchased 20% and paid 624¢/kg cwt (35¢/kg cwt discount).

The projected volume of Australian beef exports for 2016 remains just above 1 million tonnes swt, down 20% from the back-to-back record years, but still the fourth highest volume on record. Looking beyond 2016, shipments will more than likely contract with production again in 2017, before slowly gaining momentum from there and reaching 1.17 million tonnes swt in 2021.

Follow this link to read the full report and watch the video update.