Australian Beef Seasonal Outlook: Green Grass and Empty Pens

With breeding cattle inventory recovering from the lowest levels in over 30 years, there’s a unique opportunity to assess and then act on the future for the Australian beef industry. A number of challenges currently confront the Australian beef industry, including high cattle prices, low supplies, and China trade access. Australia’s position in the global protein world needs to be considered in rebuilding the herd.

Report summary

Is Australia to be a supplier to high-quality niche markets, commodity supplier (of lean beef) to global trade, exporter of live cattle, or exporter of value-added beef to trade markets? “Any or all of these options may apply, but choosing one sets a path for the future. Decisions taken this year are not just about whether to restock at high prices, but also about which genetics, production system attributes, feeding regime, supply chains, and end-customers are needed to build a sustainable basis for business in the future,” according to Angus Gidley-Baird, Senior Analyst – Animal Protein. 

Some highlights of this report: 

- Some of the lowest breeding and slaughter numbers for the last 35 years mean scarcity of supply, providing strong support for cattle prices

- Strong demand for feeder cattle will continue to restock empty pens, but it is contingent on fed cattle prices remaining buoyant to afford feedlots a margin at current record feeder prices

- Global beef markets remain finely balanced. While we expect 2021 will create a more positive market for beef demand with improvements in economies and foodservice, global protein markets are expected to increase for the first time in three years. Covid, ASF, freight, and trade tensions remain risks that could disrupt markets.

- Low availability of cattle will reduce live export numbers in 2021. High costs of livestock are testing Indonesian importers.

- While limited cattle supplies and favourable seasons are expected to provide a strong foundation for cattle prices, they are expected to decline through 2021, as some of the urgency of producer demand recedes.

- Rebuilding of herds and restocking properties is underway but is not consistent across the country. Low intentions to sell breeding cattle suggest breeding replacements is the preferred option, which will prolong the rebuild.