Heavier carcases to offset lower kill

Heavier carcases to offset lower kill


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Beef producers can look forward to prices matching the record highs of 2016 for the remainder of the year, based on tight supply.

Beef producers can look forward to prices matching the record highs of 2016 for the remainder of the year, based on tight supply.

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But Meat & Livestock Australia’s quarterly update of its 2017 Australian Cattle  Industry Projections, released this week, warns it can’t last into 2018 and 2019, as additional numbers hit the market.

It shows herd rebuilding is in full swing with female cattle making up just 42 per cent of the national slaughter from November 2016 to January 2017 – the lowest proportion of the adult kill ever seen.

The national slaughter for 2017 is expected to remain at 7.1 million head – down 3 per cent – but beef production should only fall 1pc to 2.1m tonnes, due to much heavier carcase weights. Carcase weights have averaged a record 290 kilograms from November 2016 to January.

MLA manager of market information services Ben Thomas says widespread rain in March produced a significant rise in price in all cattle categories, auguring well for the year.

“Once the increased numbers of the herd recovery start flowing through the system later this year, it is highly likely that Australian cattle prices – from heavy steers through to young cattle – will feel the weight of the additional supplies and softer global markets,” he said.

Platinum Livestock manager Wayne Hall expects supply to remain tight during the winter months but agreed prices had probably neared their peak.

“Those people who have achieved these prices have done well but most people would accept a slight reduction as long as they can have some consistency in the market,” he said.

He says it is becoming increasingly difficult for Australian beef to compete in export markets and every aspect of the beef supply chain needed to remain viable.

Mr Hall says breeders are retaining many more heifers, which ensured outstanding autumn bull sales.

“Mixed farming operations – whether it is cropping and cattle or cropping and sheep – stand up well, not just for prices but the consistent cash flow,” he said.

Access to cheap grain and good paddock feed was contributing to increased numbers of heavier finished cattle. “Every kilogram you are putting on you are getting about $3.50 a kilogram liveweight (for it) and it is only costing you $2/kg to put it on with grain – that is good economics,” Mr Hall said.

  • Details: Full report at mla.com.au/prices-markets
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