There were “signs of recovery” for the Australian cattle herd, after it hit a 20-year low, according to a senior Meat & Livestock Australia (MLA) executive.
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MLA National Livestock Reporting Service operations manager Damon Holmes was speaking at the Australian Livestock Saleyards Association (ALSA) conference in Melbourne.
“We are looking at well below average rainfall figures, not only in Victoria, but also across the rest of Australia,” Mr Holmes said.
“The restockers are getting a bit wary.
“But what we know is the south is going to be the engine room of recovery, as producers get to their core herds - Victoria has the ability to rebuild very quickly.”
Mr Holmes said herd levels should return to 2013-14 levels by “the back end of 2018.”
The MLA believed a initial slight increase was being driven by feedlots.
“One million head of cattle are on feed due to low grain prices at the end of last year and a record hay harvest,” he said.
“When people are turning off old cows they are not replacing them and they are sending heifers to works – in a 13-14 month period, there was a massive increase in the number of females turned off.”
Some of the influences on sales included an increase in US production and the push of Indian buffalo meat into Indonesia and Vietnam.
Brazil was also growing its market share into China and the US was expected to follow. Market access arrangements in America and the effects of Brexit could also help, or hinder, trade.
“Exports into Vietnam are going to have some impact,” Mr Holmes said. “We do know, as they get access, they are gong to continue to put pressure on Australian exports.”
India was the world’s largest exporter of bovine meat, accounting for about 20 per cent of the total. While some beef markets overlapped, Australia and India were targeting different consumer groups.
“The Indian government has restricted exports of red meat – it’s a space to watch and it’s very much a political position, at the moment.
“But we are world leaders in traceability of animals, certainly in the beef industry, and that sets us apart from the Brazilian product.”
“But if you put all that into context, we are three percent of all global beef production. Our clean green image sets us above others.”
The MLA felt there was a real opportunity to put high value product into the European Union and Britain. “Our guys have hit the ground running in assisting the government in getting red meat into Britain – at $14 a kilogram it is our highest value product.”
Sheep producers were culling older ewes, so the 70 million flock was not likely to change in the next couple of years.
“We are going to see a small increase, over time, as our producers are willing to retain younger ewes. Instead of holding onto older ewes, they are going to turn them off pretty quickly.”
A stable supply would reduce volatility and prices would be supported by a reduction in lamb production.
New Zealand would have a big influence, as farmers moved from prime lamb into dairy production.
“They are our main lamb and mutton competitor on an international stage, so things are going to track sideways for the next 12 months, for the lamb job.
“It’s been a good time to be a prime lamb producer, the flock will be very stable over the next five years.”
