Australia’s cattle market is sitting in a state of balance – with improved beef production waiting on an increase in demand – but an upside in prices is expected towards the end of the year, Rabobank says in its Australian Beef Seasonal Outlook 2024.
The current absence of any strong demand – along with a higher herd inventory, with no real liquidation or rebuilding urgency – means cattle prices are more exposed to changes in producer sentiment and seasonal conditions, the agribusiness banking specialist says.
However, as the year progresses, according to report author, RaboResearch senior animal protein analyst Angus Gidley-Baird the US cattle market could turn the Australian market around.
“We feel global beef demand, led by the US market, will start to have a stronger influence on the Australian cattle market, providing upside to cattle prices,” Mr Gidley-Baird said.
The report also said the rebuild of the Australian breeding herd over the past couple of years is now generating increased numbers of slaughter-age cattle.
“We believe Australian cattle slaughter will rise about 15 per cent in 2024 to be close to eight million head,” Mr Gidley-Baird said.
“Increases in processing capacity with increased labour will also support the rise in slaughter numbers. Eight million head is slightly higher than the 10-year average from 2014 to 2023 and we believe is more reflective of a ‘normal’ slaughter volume for Australia.”
Mr Gidley-Baird said with the increased slaughter number, beef production is set to increase of 10 per cent to 2.4 million tonnes carcase weight for 2024. This is slightly higher than the 10-year average of 2.2 million tonnes.
Mr Gidley-Baird said while domestic consumption of beef is forecast to drop slightly, Australian beef exports in 2024 are expected to rise by 10 per cent off the back of increased production.
“With total domestic consumption almost static, all the increased production will be sent to the export market, leading exports to increase by almost 10 per cent to 1.2 million tonnes cwt, the highest volume of exports since 2019,” he said.
The Rabobank report said demand in key Asian markets, although soft, is expected to improve in 2024 and the US export market is expected to stay strong.
