RISING cattle supplies as the dry-induced turn-off forces greater numbers onto the market than expected has seen the chief commodity forecaster lift its expectations for beef exports over the coming year.
Senior government economists now expect beef exports to grow by 3 per cent to 1.1 million tonnes shipped weight in 2018-19 on the back of increased production.
In it’s mid-year forecasts released today, the Australian Bureau of Agriculture, Resource Economics and Rural Sciences also put a figure on the drop in cattle prices expected during the next financial year.
The weighted average saleyard price of beef cattle is expected to fall by 8 per cent to average 420 cents a kilogram.
Of course, that is still a solid 8pc higher than the ten-year average, with the global demand outlook providing plenty of incentive to rebuild herds where seasonal conditions permit.
ABARES’ Jack Mullumby said assuming a return to average seasonal conditions after a dry winter, the national herd is forecast to expand for the third year in a row, this time growing by 3pc to 27.8m next financial year.
In Japan, one of Australian beef’s most lucrative markets, export prices will continue to fall, ABARES believes.
Next financial year, chilled beef prices are forecast to average 4pc lower year-on-year as a result of increased competition in Japan.
Income growth in Japan is slowing, their own beef production is growing and the United States has been very aggressive in targeting this market, global beef market experts have reported.
Meat and Livestock Australia’s in-market business Andrew Cox told a recent forum in Australia that Japan might be a mature market but it still held opportunities.
Regardless of price, Australia’s greatest advantage was consumers’ overwhelming trust of high quality, Australian beef, he said.
The lion’s share of the growth in our beef export volumes will likely head the way of China, ABARES believes.
Frozen beef export prices are forecast to rise by 3pc as supply tightens in the US, with their herd rebuild expected to peak this year.
Meanwhile, slaughter rates are continuing to increase, with an expected 4pc jump to 8 million head next financial year, but will likely be partially offset by lower carcase weights.
Keep in mind this financial year, the estimated average of 284kg carcase weight is a record.
Rising feed costs are expected to bite into feedlot turn-off.
Increased cow and heifer slaughter is also expected to reduce average cattle weights.
The latest National Livestock Reporting Service figures show the Eastern States kill total for the week ending June 15 was up 7pc on last year, with the Queensland female slaughter the heftiest figure at a 26pc increase.
The ABARES forecast, meanwhile, has Australian saleyard prices for lambs increasing by 3pc to average 612c/kg this financial year, reflecting strong export demand.
In 2018-19, they are expected to rise by another 2pc.