The Australian Beef Cattle Seasonal Outlook 2020: The Battle of Bulls Vs. Bears

The Australian cattle market will be characterised by two extreme countervailing forces in 2020. Limited cattle supplies and restocking activities provide strong domestic price support, but disrupted markets and dramatically reduced economic activity create countering downside pressures, according to Rabobank’s ‘Australian Beef Cattle Seasonal Outlook.’

Years of high female slaughter have reduced breeding cattle inventory, and improved seasonal conditions will likely encourage producers to hold or purchase stock to rebuild herds, compounding the reduction in slaughter. “Improved slaughter weight will not be enough to offset the reduction in numbers. Consequently, we expect production, as well as exports, to also decline,” according to Angus Gidley-Baird, Senior Analyst – Animal Protein.

“However, disruption to markets and dramatically reduced economic activity resulting from Covid-19 will place downward pressure on prices. On balance, we believe domestic forces will play a stronger role in keeping cattle prices high. But the severity and suddenness of Covid-19 and the ensuing economic slowdown to levels not seen in over a decade will test markets.”