Meat and Livestock Australia’s (MLA) mid-year outlook includes a rainy weather forecast through September. This will continue to support cattle prices, which are currently holding close to record levels. MLA’s slaughter projection for 2016 is 7.4 million head, down 18 percent from 2015 and the third-lowest since 1996. Australia’s 12-month rolling average for females as a portion of the national kill is 48.6 percent, down from the peak of 50.6 percent in 2015. But the female share is expected to drop below 44 percent when full herd rebuilding takes hold.

Heavier carcass weights, with more cattle on feed, more steers in the mix and lower stocking rates are partly offsetting the drop in slaughter numbers, putting MLA’s 2016 production forecast at 2.17 million metric tons (mt), down 15 percent year-over-year. Exports were down 18 percent through June, and for the full year are expected to be down 20 percent at 1.025 million mt. Other notes from MLA’s outlook include:

• Although the U.S. market for 90CL has decreased from the 2014-15 highs, prices are closer to the recent historic average and returns are still high in Australian dollars.
• Australian beef is facing stiff competition from the United States in Japan, and rapidly growing competition in China from Brazilian beef.
• Australia’s exports and production are expected to decline further in 2017, before starting to rebound in 2018.