‘Significant adjustments’ likely in Australian cattle herd

Meat and Livestock Australia (MLA) recently released its 2015 cattle industry projections which stated that “the Australian cattle industry is likely to see significant adjustments over the coming year”.

Australia has been experiencing drought across some of its largest cattle producing regions of the country.

The projections stated that “cattle turn-off (slaughter and live exports) in 2014 was at an all time high – at an estimated 10.5m head”.

The projections also stated that the “Australian cattle herd is expected to decline to 26.8 million head by June 2015 – going from what was a 35-year high cattle herd to what will be a two decade low herd,” in the space of just two years.

The cattle herd is expected to further decrease in 2016 to 26.5m.

The MLA expects Australian cattle slaughter to decline 15% year-on-year to 7.8m head.

The US market continues to remain one of Australia’s largest exporter markets for beef. According to the projections “under the assumption of tighter Australian beef production, an export market realignment is anticipated, with a greater proportion of exports trending back toward the larger, traditional markets of the US, Japan and Korea.”

Domestically, the market looks likely to remain under pressure the projections state.

“One of the key assumptions forming the basis of the 2015 cattle industry projections is that Australia will phase out of drought over the coming 12 months, with a greater proportion of production and exports to occur in the first half of the year, before easing in the final quarters.

“With this as a key assumption, and given the heavy influence seasonal conditions play on the Australian beef supply situation, the Cattle Industry Projections will be updated on a quarterly basis.”

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