![Cattle slaughter and beef production continues to increase but whether producer sentiment is in a state of rebuild or simply holding steady is up for debate. Cattle slaughter and beef production continues to increase but whether producer sentiment is in a state of rebuild or simply holding steady is up for debate.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/d884fba1-ab2b-4458-80b5-ac4bdd37d723.jpg/r0_0_2400_1349_w1200_h678_fmax.jpg)
The great 2024 cattle market quandary of whether producers are thinking rebuild or contraction remains firmly in place following the release of the first government beef production figures for the year.
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The Australian Bureau of Statistics has the female slaughter ratio - the indicator of herd rebuild or liquidation - sitting contritely on the threshold at 47 per cent for the first three months of 2024. Above that figure, the herd is considered to be in destock, below in rebuild.
The ABS data shows cattle slaughtered in the March 2024 quarter increased 3.4pc to 2 million head on the previous quarter and beef production lifted 3.1pc to 606,009 tonnes.
That, of course, is in line with more supply on the back of years of rebuilding. While there is widespread agreement that supply will continue to rise from here, the question is whether any of that volume increase will come from destocking.
Many agents and some analysts are adamant rebuilding overall is happening, saying price is a better indicator of where producer sentiment is right now than slaughter numbers.
The Eastern Young Cattle Indicator has been gradually rising for the past month, currently sitting at 35 cents a kilogram carcase weight above where it was at the end of April.
These commentators believe the improved seasonal conditions across the nation's biggest cattle state, Queensland, are more than offsetting herd contractions happening in the south due to dry.
Others, however, say nothing other than a static herd size and a maintenance phase can be declared right now.
Meat & Livestock's forecast of a slight herd contraction for 2024 has been given weight by the latest ABS statistics, these observers say.
The whole story
StoneX analyst Ripley Atkinson said strong fertility rates and optimal calving and joining conditions in Queensland, and across the north more broadly, was evidence of a rebuild.
He said the FSR was not telling the entire story at the moment.
In fact, it would likely rise again in the second quarter, with first-round musters in the north and pregnancy testing in the southern herd turning off cast-for-age and empty cows and heifers, he said.
But that would be a seasonal peak and not an indication of liquidation.
Agforce cattle president, Queensland grazier Peter Hall said no one was rushing out to buy in big numbers but producers were perhaps breeding up at a faster rate than expected.
"We've become pretty efficient at breeding cattle and today we have very fertile herds. Combined with good seasonal conditions, that has resulted in a good supply of cattle coming on this year," he said.
"But most people are conscious of looking after their country, and not creating any oversupply situation, so I don't think demand to buy in cattle is going to go through the roof anytime soon."
The case for static
Big agribusiness lender Rabobank has cattle herd numbers remaining steady for this year.
Analyst Angus Gidley-Baird said even the good rain in the north had not delivered an urgency in producer desire to restock.
"Many Queenslanders we've talked to are cautious about throwing a lot of stock at the grass they do have," he said.
While the seasonal outlook was better now than this time last year, there was still uncertainty about what exactly was coming in terms of rainfall.
Equally, where the season had turned very dry and was creating additional pressure in the south, it appeared there was no panic selling happening, he said.
Thus, the herd is in balance.
More supply
Cattle supply is generally expected to crank up from here, with musters getting underway in the north and nothing on the radar in the way of rain in the south.
Particularly strong numbers are expected out of Queensland's channel country in the near future.
That may put some downward pressure on prices if assessments on the steady restocker demand are right, although the solid attention from the finished end should give traders incentive to keep bidding, agents said.