AUSTRALIA’S great cattle herd rebuild is now well underway, with the latest industry projections putting numbers around 28.5 million head by 2021.
From this year’s 26.7m, it’s a solid jump but the cycle of a drought-induced mass cattle sell-off followed by a continual build-up over many years is nothing new in the beef business.
What would it take to grow the national cattle herd by a far more significant five or ten million head?
Because that is what many industry watchers believe will be required to meet the competing demands of a fast-growing, Asian-driven global appetite for beef, the live export trade and domestic consumption as we head towards 2030.
Meat and Livestock Australia cattle market guru Ben Thomas said the first thing required would be a string of good seasons to substantially lift calving percentages.
“That was the catalyst behind the massive rebuild from 2011-13, which got us to the 30m head mark,” he said.
To go beyond that, sustained very strong market conditions would be needed to incentivise producers to shift more resources to beef.
“Under current dynamics, history says at the 30m head mark we get constrained,” Mr Thomas said.
“We hit a point where we are competing for land area with croppers and sheep and wool producers and there is generally not enough of an argument for beef to take over.
“Market conditions would have to be such that those in a region where they can switch from other agriculture sectors would indeed gear up their beef more and more.”
A 50m head cattle herd could be possible - without cropping and sheep and wool production in Australia, he said.
ANZ agribusiness manager Mark Bennett said while there were plenty of specialists in the beef industry, a good deal of southern cattle country was run by producers with interests in other industries which often present less volatility in earnings.
Many who run flexible systems want to retain some diversity, and do so even when returns in one commodity are at a record high, he said.
“We believe there is enormous capacity to run far more sheep in the system and have prices still hang on,” Mr Bennett said.
“Beef, on the other hand, has a production element that can pressure us in global markets. Australia’s sheep industry, by comparison, doesn’t really face that competitive angle.”
Mr Bennett believes underutilisation of the north is a larger factor at play when it comes to talk of a 30m-plus cattle herd.
“The more we seen intensification of the north - the better grazing management systems, digital technology supporting productivity increases, advancements in genetics and breeding, lifted carrying capacity - the more our capacity overall is increased,” he said.
“If that coincides with a run of good seasons, it has the potential to not just see a rebuild to where we were but go beyond that.”
Consolidation was playing into that by allowing for cash investment in efficiencies, providing the potential to accelerate the rebuild at a more rapid rate, according to Mr Bennett.
Outsider investor interest in beef was probably at an all-time high, he said.
The positive aspect was that with cattle trading at historically high prices, those buying in have to take a long view and establish long term programs.
“That is exactly what is happening and that in turn is providing optimism throughout the industry,” Mr Bennett said.
“It’s paving the way for improved and diverse supply chains and overall growth.”
The only other way our herd might go well above 30m, according to analysts, is via a rise in the number of cattle going through feedlots.
A model similar to United States cattle production would deliver a far larger cattle herd, however it would come at the expense of grassfed production.