Whether the cattle herd is in a rebuild or liquidation phase has become hotly debated with forecasts for how 2024 will play out now diverging rather dramatically.
The implications of the lack of widespread agreement on whether producers are looking to ramp up numbers in the months ahead are significant.
They include the signals sent to global customers about the volumes of Australian beef that will be available and sentiment around how the cattle market is likely to perform.
While there is no disagreement about elevated turnoff this year courtesy of rebuilt herds, the question is whether breeder numbers will grow, decrease or sit stable over the next year.
Industry body Meat & Livestock Australia's 2024 projections have the herd easing slightly this year, with a larger decrease next year. MLA's analysts describe the period Australian beef is about to enter as a 'maintenance phase'.
Prominent industry analyst Simon Quilty, Global AgriTrends, disagrees. He says a rebuild is far more likely.
He says Australian Bureau of Statistics December quarterly figures point to this, and weather forecasts are now favourable towards producers holding onto, and in some areas, building up numbers.
Good rains received since November saw the rate of liquidation in NSW and Victoria slow, while female retention was happening in earnest in Queensland, he said.
With numerous weather forecasts now saying Australia will revert to a La Nina in June, which will likely remain for at least 12 months, the confidence to buy stock will be high, he believes.
"Given this evidence, it isn't easy to understand why MLA has a liquidating herd over the next three years. They are forecasting a fall in herd size and high slaughter rates that would require a drought equivalent to 2018 and 2019," Mr Quilty said.
"My concern is that such large slaughtering figures imply, yet again, a wall of meat to be sold from Australia. This is misleading and harmful to global markets.
"2023 was a challenging year for beef sales as customers were unwilling to buy forward, believing more beef would come.
"MLA's figures will continue to encourage this approach."
Mr Quilty sees Australian beef exports falling this year.
Initially, larger shipments will occur, but as the rebuild goes on, production and exports will slow in the back half of the year, he said.
Other analysts say 2024 is an unusual year and will be heavily contingent on weather and rainfall outcomes, which makes it difficult to say whether the herd will officially be in rebuild or liquidation.
The shift between the two occurs when the female slaughter ratio moves above 47 per cent, considered the tipping point into herd contraction. It is currently sitting at 46.9pc.
Government economists will release their herd and saleyard price forecasts tomorrow.
Big agribusiness lender Rabobank will put out its cattle herd forecasts at the end of this month but early indications are these figures will be close to MLA's for production and slaughter.
However, Rabobank is expected to say the stronger supply will come from increased herd numbers rather than any liquidating.
Rabobank will based its forecasts on an average season for 2024.
Ripley Atkinson, Australian livestock and commodities manager for StoneX, also agrees slaughter volumes will rise strongly and said his numbers were broadly in line with MLA's.
However, he also has a different perspective on herd and carcase weights.
He said MLA had underestimated the influence of the northern herd's growth.
"Generally, all of the north is primed for a very strong year, with good conditions promoting strong fertility rates," Mr Atkinson said.
"For this reason I believe the herd will grow above 30 million head, which would make it the largest since 1976.
"With the forecast wet weather across southern Australia as well, its herd won't decline either."
Mr Atkinson has carcase weights for 2024 above 315 kilograms a head average, based on "solid genetic investments made over the past four years."
Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
