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Cattle slaughter projected to hit lowest level in 35 years

29 April 2021

A major reduction in slaughter volumes on the back of significant rainfall in northern Australia over summer has fuelled the prospect of the national cattle herd rebuild intensifying, according to Meat & Livestock Australia’s (MLA) Cattle Industry Projections April update.

The cattle herd is predicted to increase by 5% to 25.9 million head, close to its size in 2019 before the final year of widespread drought induced de-stocking took place.

MLA Market Information Manager, Stephen Bignell said significant rainfall in northern Australia across summer has led to sufficient pasture germination for the up-coming dry season, boosting producer confidence and translating into record high livestock prices.

“More than expected rainfall led to sufficient pasture ahead of the dry season and has encouraged Northern producers in particular to restock, driving the market even higher,” Mr Bignell said.

“Summer rainfall encouraged producers to acquire as many cattle as possible before the northern dry season starts - pushing the Eastern Young Cattle Indicator (ECYI) to break the 900c/kg barrier for the first time in history.

“Carcase weights are also expected to increase 3% this year as producers and feedlots utilise the abundance of pasture and cheaper feed which is translating into heavier weights.”

Mr Bignell said lower slaughter numbers and reduced supply of cattle through saleyards demonstrate that the herd rebuild is gathering momentum.

“As producers look to retain cattle and take advantage of the improved seasonal conditions, cattle slaughter is expected to fall 11% from 7.2 million head in 2020 to 6.4 million head in 2021,” Mr Bignell said.

“The need to rebuild the national herd following the drought, and the current and forecast growth in demand for Australian beef internationally, has intensified the rebuild. Many producers are focusing on the longer-term outlook of their beef operations and rebuilding herd numbers. There is also a significant number of producers trading cattle in order to take advantage of current grass levels.

Mr Bignell said the fall in slaughter and production would flow onto export volumes, but demand for Australian beef remained high.

“Export volumes are expected to fall 12% to 1,350,000 tonnes cwt, however the reduction in exports is a result of cattle supply shrinking and is not linked to demand. Demand for Australian beef remains high which can be demonstrated by the price being paid on a per kilo basis,” Mr Bignell said.

Australian live exports are forecast to fall 26% this calendar year to 750,000 head, however by 2023 live exports are tipped to rebound 27% to 950,000 head on the back on increased supply, easing prices and the economic recovery of key trading partners post COVID-19.

Read MLA’s 2021 Cattle Industry Projections