Australia's beef, cattle output may drop this year

A drop in slaughter cattle will lead to lesser beef production in Australia, according to the US Foreign Agricultural Service (FAS).

About 8.6 million head of cattle will be slaughtered, down from 8.78 million a year ago, said agricultural specialist Mike Darby. Beef and veal output is expected to drop 2.7 percent to 2.1 million tonnes, and prices will decline as Australian meat exports fall, Darby said.

Supply of slaughter cattle is seen to drop this year due to historically low numbers of cattle on feed, Darby said.

A lack of export demand in key markets such as Japan and South Korea is also expected to pressurise domestic prices, he said.

Cattle inventories may increase to 28.95 million head this year from 28.58 million in 2008 due to higher suppliers of feed grains and low cattle prices that convinced producers to retain animals rather than sell to slaughterhouses, Darby said.

Massive flooding in northern Australia may have killed as many as 150,000 head of cattle, he said.

Beef exports are projected at 1.35 million tonnes, down 4.1 percent from the previous year, said the FAS report.