3 March 2011

2 minute read

Oceania

ABARES forecasts higher prices for cattle, herd and production growth over the medium term, along with an increase in exports.

The forecast rise in cattle prices for coming years is largely the result of increased competition for cattle on the back of the better season, with ABARES anticipating an 11 per cent lift in 2010-11, and a further five per cent increase in 2011-12. Producers will be looking to take advantage of favourable feed conditions and rebuild herds, while processors will be keen to secure additional supplies to meet demand from the export markets.

The much better season in eastern Australia has encouraged producers to retain stock and begin rebuilding herds, with ABARES forecasting the national cattle herd to increase by two per cent in 2011-12, to 27.9 million head. Furthermore, the effects of the floods in Queensland and northern NSW appear to have had little impact of herd numbers, with minimal losses. ABARES (assuming favourable seasonal conditions) predict herd numbers to increase to around 28.7 million head by the end of 2015-16.

Herd rebuilding in eastern Australia will influence turnoff rates, with national adult cattle and calf slaughter remaining constrained in 2011-12, at 8.5 million head. Despite tight slaughter numbers, production levels are expected to increase by approximately two per cent over the same period, to 2.19 million tonnes cwt, fuelled by rising carcase weights.

ABARES forecasts that beef and veal exports will increase by two per cent in 2011-12. Exports to the major markets of Japan (368,000 tonnes swt), Korea (132,000 tonnes swt) and the US (190,000 tonnes swt) are all expected to rise in 2011-12, by three per cent, six per cent and three per cent, respectively. The emergence of Russia will intensify competition for Australian beef, with exports forecast to reach 80,000 tonnes by 2015-16.

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