Australian beef cattle prices are expected to remain elevated over the next year, supported by improved restocker demand on the back of better seasonal conditions and healthy export demand.
NAB’s Beef in Focus Report says after falling to a nine-year low in October 2023, reaching 349¢/kg, the benchmark Eastern Young Cattle Indicator (EYCI) is now above the 2015-19 average.
In March 2024, the EYCI was 70 per cent above its October lows in monthly average terms.
The upwards trajectory was helped along by seasonal conditions, including the end of the positive Indian Ocean Dipole event and a return to neutral El Niño-Southern Oscillation (ENSO) conditions.
Australia experienced its third-warmest summer on record in 2023-24 but it was also wetter than average. Nationally, rainfall was 18.9 per cent above the Bureau of Meteorology’s recoded long-term average (1916-1990) and in Queensland, it was 30 per cent above the average.
Three out of seven international climate models are currently predicting a La Niña event to develop by August, while the other four models indicate that ENSO conditions will remain neutral.
NAB’s Lea Jurkovic said the value of Australian beef exports has been on the rise since 2020-21 and has recently been supported by higher export volumes.
“Demand from the United States has been particularly strong, supported by low slaughter rates after the liquidation of the US herd, which is now at its lowest level in over seven decades following prolonged drought conditions,” Ms Jurkovic said.
“Export demand is also strong from Japan, while China remains the largest destination for Australian beef.”
The Australian cattle herd is at its highest level since 2014 but is forecast to contract slightly in 2023-24.
“Looking forward, strong export demand and an expected increase in saleyard prices will likely contribute to the expected increase in the turn-off rate,” Ms Jurkovic said.
“Female cattle slaughter rates have lifted in recent quarters, consistent with the overall increase in slaughter rates.
“Both Meat & Livestock Australia and ABARES expect the herd to decline over the coming years as slaughter rates increase, though MLA expects a sharper decline earlier.”
To read the full NAB Beef in Focus Report, go to: https://business.nab.com.au/nab-beef-cattle-in-focus-april-2024/