According to Meat and Livestock Australia’s (MLA) projections for 2016, Australia’s national cattle herd will decline to 26.2 million head by mid-year, then further decline slightly in 2017 to 25.9 million head. This would mean a 12 percent (or -3.4 million head) decline since 2013 and the smallest national herd since 1993. Total cows and heifers are projected at 11.7 million head in 2016, down 11 percent from the 2014 peak of 13.2 million. Cattle on feed, which totaled 960,000 head in December 2015, are projected to decline to 900,000 (-6 percent) by December 2016, but this would still exceed the pre-drought average of 800,000 head.
MLA projects 2016 slaughter to be 7.6 million head, down 16 percent year-over-year. Average carcass weight is expected to increase 3 percent to 286 kg. On a carcass weight basis, beef production is projected to decline 13 percent in 2016 to 2.2 million metric tons (mt), then drop another 6 percent in 2017 to 2.06 million mt.
Australia’s chilled/frozen beef exports are expected to drop 18 percent in 2016 to 1.055 million mt, the lowest since 2012. Another 10 percent decline, to 950,000 mt, is projected for 2017. Live cattle exports are expected to drop 17 percent to about 1 million head, the lowest total since 2013, then decline another 7.5 percent in 2017.
Reflecting smaller beef production, Australia’s exports have been below year-ago levels each month since July. January exports of chilled/frozen beef totaled 58,299 mt, down 14 percent year-over-year, despite increases to South Korea (9,510 mt, +27 percent) and China (5,317 mt, +28 percent). These gains were offset by lower exports to the United States (16,763 mt, -35 percent) and Japan (11,655, -25 percent). Among other markets, Australia’s January exports increased year-over-year for Indonesia (3,958 mt, +112 percent), the Philippines (1,474 mt, +77 percent) and the European Union (1,328 mt, +31 percent), but trended lower for the Middle East (2,894 mt, -6 percent), Canada (1,356 mt, -20 percent) and Taiwan (1,277 mt, -25 percent).
Australia’s cattle indicator price hit a new record in mid-January at A$6.00/kg and has held close to this level – most recently averaging A$5.95/kg, up 32 percent from a year ago. The U.S. dollar equivalent is $1.93/lb, up 21 percent.
Data sources: Meat and Livestock Australia, Australia Department of Agriculture