BEEF producers will go into breeding overdrive in 2012 if the latest forecast by national commodity forecaster ABARES is to be believed.
The agency's December report released yesterday suggests the national cattle herd will increase 5 per cent by the end of this financial year to 30.2 million head.
If that growth can be achieved, assuming favourable seasonal conditions persist across the country, it will put cattle numbers at a 34-year high.
The forecast is based on preliminary figures from the Australian Bureau of Statistics released earlier this month that estimated cattle numbers rose 9 per cent to 28.8 million head at the end of June 30 this year. Herd sizes increased in all states except Western Australia and the Northern Territory.
While the optimistic forecasts will buoy some, Top End beef producers will be deflated with news that Australian exports of live cattle are forecast to fall by 31 per cent to 500,000 in 2011-12.
Still recovering from the Federal Government's month-long halt to the trade to Indonesia in June over animal cruelty allegations, from July 1 to December 6 this year, about 253,500 cattle for feeder and slaughter purposes were exported from Australia.
Of these, about 65 per cent were exported to Indonesia. Among other markets, the largest were Israel (24,830 head), Turkey (16, 530) and Egypt (14, 600).
Since the resumption of trade with Indonesia, shipments to that country have averaged about 36,000 head a month, compared with a monthly average of 58,000 head at the height of the trade in 2008-09.
Producers with cattle to sell domestically can expect weighted average saleyard prices to remain relatively high over the next six months at an average of 326 cents a kilogram (dressed weight).
Saleyard prices are expected to be supported by a combination of strong domestic restocker demand for young cattle, limited supplies because of low slaughter rates and increased demand from emerging markets, including the Russian Federation and
those in the Middle East and South-East Asia.
Processors may again find the going tough in sourcing available feeder and slaughter cattle, with kill numbers expected to fall by 2 per cent to about 7.9 million head, the lowest since 1995-96.
While male cattle slaughter is forecast to rise, calf and female cattle slaughter are forecast to decline as producers seek to hold
back stock to increase herd sizes.
Despite the forecast reduction in total slaughter, Australian beef and veal production is forecast to remain largely unchanged in 2011-12 at 2.1 million tonnes due to higher than average carcase weights on the back of widespread fodder availability.
In the first three months of 2011-12, national average adult carcass weights were 4 per cent higher than for the same period last year.
Gains were highest in Tasmania (5.4 per cent), Queensland (4.8 per cent) and New South Wales (4.5 per cent), which together accounted for three-quarters of national production.
On the export front, Australian beef is continuing to be exposed to a greater spread of overseas consumers.
While Australian beef and veal exports are forecast to remain largely unchanged in 2011-12
at 941 000 tonnes (shipped weight, the trade is becoming increasingly diversified, with the proportion of beef and veal exported to the United States, Japan and the Republic of Korea forecast to fall to 68 per cent. Over the past decade these three markets accounted for 82 per cent of Australian beef exports.
Growth in export volumes to a number of emerging markets, including many ASEAN countries and the Middle East, is expected.
Of the traditional 'big three' ABARES says:
Australian beef and veal exports to the US were 11 per cent lower over the first four months of the year than for the same period in 2010-11. This decline was in response to several factors. First, US beef production remained historically high as drought-induced herd liquidation continued, particularly in the southern states of Texas, Oklahoma, Kansas and New Mexico. This resulted in higher domestic supplies and reduced demand for imported product during that period. Second, poor seasonal conditions resulted in reduced average slaughter weights. This led to relatively more beef being redirected into grinding, reducing demand for Australian manufacturing beef.
Over the remainder of 2011-12, total beef and veal exports to the US are forecast to recover from the low shipments of the first four months. For 2011-12 as a whole, total export shipments to the US are forecast to be unchanged from 2010-11 at 160,000 tonnes.
Australian beef exports to Japan are forecast to fall by 4 per cent in 2011-12 to 336,000 tonnes. This forecast decline reflects the combined effect of expected stable beef consumption in Japan and increased competition from US beef in the Japanese market. In Japan, consumption of imported frozen beef rose because of increasing demand in the food service sector, but this was offset by declining sales of premium fresh and chilled cuts. There has also been increased substitution of pork and chicken for beef.
Australian beef exports to the Republic of Korea are forecast to rise by 4 per cent in 2011-12 to 145,000 tonnes.
Like Japan, the share of Australian imports in the Korean beef import market has been declining because of inroads made by US beef exporters.
Despite a declining cattle herd, US beef export volumes to the Republic of Korea rose by 47 per cent year-on-year during the first three months of 2011-12, compared with a 12 per cent rise for Australian beef exports.
Over the remainder of 2011-12, Australia is expected to be the primary supplier of imported chilled beef to the Republic of Korea. Australian beef exports to markets other than Japan, the United States and the
Republic of Korea are forecast to grow by 5 per cent in 2011-12 to 300,000 tonnes.
Entry of the Russian Federation to the World Trade Organisation from December 2011 is expected to result in Australia gaining improved access to that market.
Beef exports to the Middle East are also forecast to increase, by about 15 per cent in 2011-12 to 34,000 tonnes.
Exports to ASEAN countries (excluding Indonesia) are also forecast to grow by 5 per cent to a total of 48,000 tonnes in 2011-12.
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