Slaughter rates to increase

The Southern Farmer
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NUMBERS INCREASE: MLA predicts that the number of Australian cattle slaughtered this year to be four per cent higher than last, due to poor seasonal conditions.

PRODUCER de-stocking, lack of rain and a strong international market are all predicted to drive Australian cattle slaughter to almost 7.5 million head by the end of the year, four per cent higher than last year.

Meat and Livestock Australia’s (MLA) latest update, released in the Cattle Industry Projections, predict that kill numbers will soon reflect the challenging summer/autumn seasons.

Scott Tolmie, MLA market intelligence manager, said poor rainfall across many cattle regions had temporarily subdued herd rebuilding efforts.

“The first quarter has seen both male and female slaughter running well above 2017 levels, and combined with the largely neutral weather outlook has led to a slight upward revision in the annual slaughter forecasts, up four per cent year-on-year,” Mr Tolmie said.

“The EYCI has responded to the larger flow of cattle and challenging conditions for many re-stockers, dipping below 500c/kg carcase weight (cwt) for the first time since mid-2015, when the herd rebuild began in earnest.

“For the March quarter the EYCI averaged 544c/kg cwt – down 14 per cent year-on-year, although 19 per cent above the five-year average for the period.”

Mr Tolmie said the dry summer had been particularly apparent in NSW and Victoria, where the supply of young cattle was playing a key role in driving the EYCI lower.

“Seasonal conditions for the remainder of autumn and into winter this year will dictate the availability of young cattle and how fierce the competition will be among different buyers, particularly in NSW.”

Mr Tolmie said the growing volume of exports out of the United States and some South American countries would place some downward pressure on the finished cattle market.

“Beef production and consumption levels in the United States will need to be closely monitored, with a significant lift in grainfed cattle kills expected in coming months, which is likely to flow through to increased competition in our key export markets,” Mr Tolmie said.

“US beef production is on course to exceed 12.5 million tonnes in 2018 according to the latest United States Department of Agriculture (USDA) projections – this figure represents a five per cent production increase compared to last year, as low rainfall in a number of the largest cattle producing states combined with sustained drought in the Northern Plains drive more cattle onto feed.”

Mr Tolmie said there had been a strong start to the year for carcase weights in Australia, with the year-to-February national average carcase weight sitting at 301kg, five kg higher than the same period in 2017.

“As a result, the 2018 forecast for carcase weights has been adjusted slightly higher than what was predicted in January, to 294.4kg,” he said.

“The combined upwards revision to slaughter and carcase weights has seen 2018 beef production revised slightly higher to 2.22 million tonnes cwt, while beef exports are expected to record a slight increase on 2017 levels, at just under 1.1 million tonnes shipped weight.”

More farming news and stories can be read in the June, 2018 print edition of The Southern Farmer or click here to access digital editions.