Australian agriculture outlook 2024: Cattle
Australian agriculture outlook 2024: Cattle
Australian beef production is set to lift due to strong supply on local markets.
Demand outlooks are higher across key markets as lower US supply creates further opportunities for Australian producers.
Australian cattle prices will marginally increase across the first half of 2024 due to strong export demand.
Rising beef production and opportunities for export growth provide an improved outlook for Australian producers in the next six months.
From the field
Australian cattle prices should trend higher during the first half of 2024 after experiencing significant declines throughout 2023. Greater opportunities for exports in key markets will be the driving force supporting improved prices. However, the dry weather outlook in key cattle producing regions could limit any strong price growth. This is set to keep beef production rising and restocker demand subdued.
Michael Gorogo, Senior Agribusiness Relationship Manager – Queensland
Australia’s beef production is forecast to lift eight per cent during the first half of 2024. This will place output well above the five-year average. This increase comes on the back of strong cattle availability on local markets as the herd rebuild reaches maturity. The lift in production will provide a larger supply of beef available to be exported throughout the first half of 2024. A key risk to the increase in beef output is processing capacity, with most areas booked out over three months in advance. This could limit the potential pace at which slaughter rates lift.
Global beef production is likely to remain mostly stable during the next six months. Falls in the US, EU and Canada are set to be offset by growth in Australia, Brazil, and India. Brazil’s beef production is forecast to shift two per cent upwards during 2024. The country’s recent economic recovery and seasonal conditions are likely to lead to a rise in slaughter rates. The USDA forecast shows that US beef production will decline five per cent in the next six months. This is due to tighter cattle inventories. These come as a result of their cattle herd numbers decreasing following the high culling rates in the past two years. This was driven by drought conditions in US production regions. Argentina is also forecast to record a decline in domestic production. With slaughter rates returning to levels experienced in previous years. This is following a drought induced herd liquidation in 2023 accelerating production. According to the latest USDA forecasts, the EU is expected to record a decrease in production. This is primarily due to high input costs and an introduction of new regulations on beef cattle. Producers in the EU are likely to see pressure on profit margins and lower slaughter rates as a result.
Domestic demand for Australian beef is likely to rise marginally throughout the first half of 2024. A recent downwards shift in retail prices for beef is expected to translate into a lift in volume consumed and demand for beef products in the coming months. However, the continued weight of inflationary pressures is likely to keep demand subdued for higher end beef products.
Global demand for Australian beef is forecast to lift during the first half of 2024. Australia’s beef exports recorded strong growth throughout 2023 and are expected to see further growth into 2024. It is likely that the US will be at the forefront of the lift in export demand. The latest USDA forecasts show US beef exports are expected to decline six per cent throughout 2024. This will provide further export opportunities for Australian producers into key markets, including the US itself. Exports to Japan are expected to finish lower in 2023 than in 2022. Due to the management of backlogged imports and rising domestic production which reduced appetite for imports. However, with a reduction in US exports in 2024, Japanese demand for Australian beef will increase. Exports to South Korea increased throughout 2023. Firm demand for Australian beef is expected to continue throughout the first half of 2024. Like Japan, the reduction in US exports is expected to translate into greater export opportunities for Australian producers. Meanwhile in China, domestic production is forecast to rise which is likely to result in a weakening of demand for beef imports. Opportunities for Australian beef should continue to expand into the key markets. These include Japan, South Korea and the US as US export volumes continue to fall throughout the next six months.
Australian cattle prices are expected to marginally increase throughout the first half of 2024. This comes on the back of an expected rise in export demand for Australian beef. Despite the increase in prices forecast for the next six months, prices will remain at below the five-year average. This is a result of the production growth phase the industry is in. This will continue to provide strong availability of cattle on the market when compared to the last couple of years. However, with forecasts showing cattle regions may experience a dry summer, high cattle turnoff rates could occur. This would limit significant increases in prices. Australia’s cattle prices recorded a strong decline throughout 2023. This was due to rising supply levels applying downwards pressure on local pricing. Prices had reduced by over 59 per cent by late October. However, prices started a recovery in November to sit 34 per cent lower. By the end of November 2023, the Eastern Young Cattle Indicator was 13 per cent lower than the 10-year average. Global beef prices will gain support from the decrease in US supply and the export opportunities that it presents.