Cattle Herd Slowly to Rebuild

AUSTRALIA - The Australian cattle herd is forecast to slowly rebuild towards 28 million head over the next five years, underpinned by favourable conditions in northern Australia and improved incomes for cattle producers, according to the Australian Bureau of Agricultural and Resource Economics’ (ABARE) Australian commodities.
calendar icon 8 March 2010
clock icon 2 minute read
Meat & Livestock Australia

However, over the coming year, ABARE expects the high A$ and increased competition from US beef in Japan and Korea to continue to pressure saleyard cattle prices, which are forecast to average six per cent lower in 2009-10 and three per cent lower in 2010-11. According to ABARE, cattle prices will start to improve from 2011-12 onwards, rising steadily through to 2014-15.

Stronger competition from US beef in Japan, along with sluggish beef demand and a high A$ will result in exports to Australia’s largest export beef market contracting six per cent in 2009-10, to 341,000 tonnes swt. Additionally, a four per cent decline in beef production for the year will also constrain the amount of beef available for export. According to ABARE, the main impact on Australian beef of the return of US beef in Korea will be in the 2010-11 fiscal year, with Australian shipments forecast to decline six per cent, to 110,000 tonnes swt.

For the US, Australian shipments in 2009-10 are forecast to fall to 240,000 tonnes swt, before increasing eight per cent in the following year, to 260,000 tonne swt. According to ABARE, Australian shipments to the US are expected to steadily increase through to 2014-15, to 295,000 tonnes stw, as the US cattle herd enters a rebuilding phase, constraining beef production and raising demand for imported product.

For the Australian live cattle export industry, ABARE has forecast a further expansion in exports through to 2014-15, reaching 1.04 million head. The steady rise in shipments will be primarily underpinned by strong demand from Indonesia, along with further herd growth across northern Australia.

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