September 5, 2024

 

Australian cattle herd passes peak as decline begins, industry projections show

Australia's national cattle herd has reached its cyclical peak, according to the mid-year Cattle Industry and Sheep Industry projections by Meat & Livestock Australia (MLA).

 

The herd has operated at maturity over the past 12 months, but new projections indicate that it has now begun to decline.

 

In 2024, the national herd is expected to decrease by 1.4%, dropping to 30.2 million head. This represents a reduction of just over 400,000 head, as outlined in the updated Cattle Industry projections.

 

The northern cattle herd is projected to stabilise throughout 2024 and 2025, supported by average wet seasons that will help maintain a productive breeding herd. Increased numbers of cattle are also expected to be exported to Southeast Asia, bolstering the northern herd's stability.

 

Meanwhile, Southern Australia is set to lead the contraction of the national herd during the forecast period. Strong overseas demand for beef is driving a higher turn-off rate in a herd that is now considered mature.

 

The Australian Bureau of Statistics (ABS) reports that this reduction in herd numbers places the herd in a slight destocking phase. The herd's age profile has continued to mature following the herd rebuild that occurred between 2020 and 2023. Simultaneously, strong international demand is encouraging the turn-off of cattle ready for processing.

 

Adult cattle slaughter is expected to increase by 16% in 2024, reaching 8.2 million head. This marks the highest slaughter rate since 2019. Projections indicate that slaughter rates will remain relatively stable through 2025 and 2026, as the high turn-off rate continues.

 

Elevated carcase weights are expected to push beef production to record levels in 2025, with production forecasted to reach 2.55 million tonnes. Strong international demand for beef, combined with overseas supply shortages, is creating opportunities for Australia in the global market.

 

Erin Lukey, senior market information analyst at MLA, highlighted the challenges facing the US cattle industry. "The United States cattle herd is likely to enter 2025 smaller than it was in 2024, a year that saw the herd at its lowest point in 72 years," Lukey said.

 

"Regardless of when the US enters a rebuild phase, cattle supply will remain low due to below-average calving rates over the past five years and a decline in cattle availability."

 

Lukey added that the current beef shortage in the US will continue to drive demand for Australian beef globally. "This is not only the case in the US, where Australian beef serves as a direct substitute for domestic products, but also in key north Asian export markets where Australia and the US are competing for market share," she noted.

 

-      Meat & Livestock Australia