Recovery Well Underway, but the Process Will Be Slow: Australian Beef Seasonal Outlook 2022

As cattle numbers start to lift, producers need to be conscious of the pressures these increased numbers can create in the supply chain and the implications for any cattle sales. Increased cattle numbers will see some of the urgency leave the cattle-buying market, so prices will drift down. But domestic consumption and export markets are favourable, and we don’t believe there will be any rapid price drops. As cattle numbers increase, buyers will become more discerning. If people are going to continue to pay high prices, they will choose better quality cattle. We expect poorer cattle and those that don’t meet specifications to see heavier discounting. Additional cattle will also load up the supply chain. Existing constraints, like freight costs, container availability, port congestion, and labour availability at processing plants will come under further pressure. These constraints will limit the ability to expand capacity to meet the supply increase and may lead to some delays in processing cattle and to additional downward pressure on prices.