We can't keep slaughtering female cattle at such a rapid rate without having an impact on the future herd and cattle supply.
Meat & Livestock Australia's (MLA) October update to its Cattle Industry Projections has taken recent slaughter into account and forecast the lowest slaughter in 30 years, for two years in a row.
Continued strong cattle slaughter in general, and female slaughter in particular has led MLA to revise 2019 total slaughter higher again.
This time they have lifted 2019 cattle slaughter to 8.4 million head (Figure 1).
The dry weather and continued herd liquidation have driven the rise in this year's slaughter and taken cattle away from the future.
The herd is expected to decline by 2 million head when we see the June 30, 2019 herd figures (Figure 2).
With most of the herd decline expected to be behind us, plenty of cattle needed to be stripped from future slaughter to see herd growth.
MLA has kept the slaughter forecast for 2020 at 6.9 million head but decreased the 2021 slaughter forecast to a new 30 year low of 6.8 million head.
The 2021 slaughter forecast is to be 5pc lower than the previous forecast and a massive 19pc decline in 2019.
The last time slaughter was below 6.85 million head was in 1989.
The increase in 2019 slaughter has effectively been taken off 2021.
In 2022, cattle slaughter is expected to get back to 7.5 million head, which could be a struggle with the herd still growing.
Live exports are also expected to decline in coming years.
After an 8pc rise in 2019, MLA expects a 23pc fall in 2020.
Strong live export demand is expected to keep numbers at levels well above historical lows, despite what is expected to be very strong slaughter pricing.
What does it mean?
Mecardo has been talking for some time about the strengthening export beef demand and if we get something near a normal season, we are going to see a collision of tight supply and strong demand.
We saw something similar back in 2016 and 2017, but this time supply will be tighter, and demand is currently stronger.
It is safe to expect strong rises and record prices for all cattle categories, but store cattle are going to see the largest upside.
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