Better seasonal conditions across much of Australia this fiscal year are expected to help raise beef cattle numbers moderately and to expand future production, the Australian Bureau of Agricultural and Resource Economics (Abare) said Tuesday (Jun 8).

However, one consequence of herd rebuilding in the fiscal year to June 30 has been reduced sales of beef cattle, with farm cash incomes expected to fall 18% to an average AUD66,000 (US$54,306) per farm in northern Australia, and to tumble almost 50% to AUD31,700 (US$26,079) per farm in southern Australia, according to Abare report on the financial performance of beef cattle farms from 2007-08 to 2009-10.

The larger fall in average farm cash income in southern Australia reflects the impact of persistent dry conditions since the 2002-03 drought, which have led to extensive destocking in this region, Abare reported. "This destocking is expected to limit the recovery in calving numbers in 2009-10," it added.

Australia, the second-largest supplier of globally traded beef after Brazil, exports around two-thirds of production, mostly to the major markets of Japan, the US, South Korea and South-east Asian nations. The level of exports each year is closely tied to production.

For much of the past decade, seasonal conditions have had a significant effect on the Australian beef cattle industry, Abare reported.

For example, a drought in 2002-03 and extended dry period from 2006-07 to 2007-08 resulted in contractions of cattle numbers. Extensive destocking was also one of the factors that caused saleyard prices to fall during these periods. Despite this, cattle numbers were higher in 2008-09 than in 1999-2000, it said.

In March, Abare estimated beef cattle numbers would reach 24.7 million head by June 30, up from 24.5 million a year earlier.