Dry winter influences September cattle slaughter

Key points:

• Dry weather and some recovery in herd numbers saw slaughter during September lift and took year-to-date throughput to slightly lower levels than 2016
• beef production remained steady for the year, underpinned by a 3% increase in average carcase weights
• given the recent rain it is likely that slaughter in November and December may be below year-ago numbers

Australian adult cattle slaughter for the month of September was 11% higher year-on-year, totalling 612,915 head. The number of cattle being consigned to slaughter surpassed year-ago levels in June and has tracked above last year every month since taking the year-to-date total to 5.4 million head, just 2% lower than 2016. This reflected the tight supply that limited numbers in the second half of 2016 and the dry conditions and recovery in herd numbers that has underpinned a greater turn off since June in 2017.

In comparison to 2016, female slaughter for 2017-to-date has been significantly reduced; back 7% to almost 2.5 million head. Consequently, the proportion of Australian cattle slaughter consisting of females equated to 46% - indicating the intention to rebuild numbers. This trend was evident in all states except Queensland, reflecting the poorer seasonal conditions that affected much of the state.  Meanwhile, total male slaughter lifted 3% year-on-year to 2.9 million head.

On the back of the higher September slaughter, production for the month lifted 14% year-on-year, totalling 181,447 tonnes cwt. This took production volumes for the year-to-September period to similar to that of 2016, on 1.6 million tonnes, driven by an increase of 3% in average carcase weights over the same period of time. Fewer females being consigned to slaughter has influenced the lift in carcase weights, but it also reflects the greater proportion of Australian production being sourced from feedlots, with currently more than one million head on feed, nationally.

Given the recent rain across parts of the country and the Bureau of Meteorology’s average outlook for much of the eastern states, it is likely that the retention of breeders will continue, particularly in Queensland. The improved seasonal conditions will also affect the availability of other stock categories. Indeed, the rain induced tighter supply has supported prices, with over-the-hook indicators rising over recent weeks in an attempt to secure cattle.

Considering the dry seasonal conditions that were apparent in November and December in 2016, which drove an uplift in supply, slaughter during the remaining two months of 2017 may slip to below year-ago levels.