Only slight increases in the cattle slaughter, and beef production, are expected during 2018, with the herd rebuild continuing to put pressure on supply.

Herd rebuild gathers steam

THE push to rebuild herds, spurred by optimism from growing global demand for beef and a belief in long term profitability, looks set to once again dominate the cattle market story in 2018.

Where decent rain is added to those underlying dynamics, the ongoing herd rebuild should restrict cattle flow, fuel restocker demand and keep solid pressure on prices.

The 2018 Australian cattle projections from key industry body Meat and Livestock Australia (MLA), released this week, have supplies remaining tight this year with only a 3 per cent rise in adult slaughter to 7.4 million.

The heavier carcase weights of 2017 won’t feature as much, which should see beef production lift just 1pc to 2.17 million tonnes carcase weight.

This week’s forecasts are tighter than MLA had previously flagged but some livestock agents and producers believe they might still be slightly ambitious.

Despite the subdued nature of demand in the past month, restocker appetite, given the right seasonal conditions, is ferocious, they argue.

One point there is widespread agreeance on: rain in Queensland, home to around half the national beef herd, is the critical factor.

NSW agent Shad Bailey, Colin Say and Co at Glen Innes, said the market downturn of the past month had been due purely to dry conditions, especially in the north.

Yet at New England sales this week, young cattle made over $4 a kilogram, with heifers predominantly going back to the paddock as breeders and steers to backgrounders, Mr Bailey said.

“Restocker demand is still hot and there is big female support,” he said.

“The rebuild still has years left in it. It doesn’t happen overnight.

“In the south, the Wagyu boom has also taken big numbers of Angus females out of the mix and live export has been stronger in recent years with Angus females and steers - all this has added to the need and desire to replenish.”

With weather models predicting rainfall across large sections of Queensland pastoral country this weekend and the outlook for the rest of the northern wet season slightly positive, the case for a rebuilding ramp-up is strengthened.

Bank analysts said cattle prices should stabilise while the rain event remained a possibility.  

However, the window in terms of establishing a body of feed for winter in the driest parts of Queensland, including the north west, is closing fast, consultants said.

“The next three to four weeks will be critical - it will shape what feed restockers can count on,” Queensland’s Ian McLean, co-author of the recently-released Australian Beef Report, said.

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