Cattle slaughter slow-down on the horizon

Cattle slaughter slow-down on the horizon

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Ros and Jim Thomson, Allansford, were on the lookout for steers to take home at Warrnambool. Photo by Alastair Dowie.

Ros and Jim Thomson, Allansford, were on the lookout for steers to take home at Warrnambool. Photo by Alastair Dowie.

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Female turn-off is likely to soon impact cattle throughput.

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FEMALE cattle slaughter continues to trend higher, last week up 6 per cent year-on-year.

According to Meat & Livestock Australia's (MLA) latest records, female cattle slaughter reached its highest March volume since 1980 this year, at 426,496 head.

January to March figures for this year were the second highest of any quarter in that time frame, having only been surpassed in the first quarter of 2015.

However, male cattle slaughter was down 3pc year-on-year for January to March, and MLA's last prediction in April had adult cattle slaughter for the year falling 2pc to 7.7 million head.

This reflects the impact high female turnoff is having on overall herd numbers in the country already, with more reductions likely to come as many areas didn't receive the autumn rain they were banking on.

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Rabobank animal protein senior analyst Angus Gidley-Baird released his cattle quarterly this week and he said despite higher cattle slaughter levels overall this year, the declining herd could mean production falls even further than the industry current predicts.

"Male slaughter year-to-date is down 3pc - last year we were down 1pc across the year - which goes to show we've got a declining breeder herd out there and as a result less cattle in the system," Mr Gidley-Baird said.

"And we are probably on a bit of a downhill slope from here given we've had consistently high female slaughter - these males going through the system at the moment are one-year of age plus, which goes back to 2017 before the dry started to impact the cattle herd.

"I thought [slaughter] would come back to 7.5m head...if it wasn't dry we would see that drop off considerably, but as it is dry young cattle are going through the system quickly and people are still selling cattle."

Female slaughter is up 14pc for the year-to-date on last year, but Mr Gidley-Baird said that was coming off a lower base meaning there was still not the same volume of turn-off as the 2014-2015 season.

"Cow prices haven't been too bad...they got a shot in the arm in March because of rain and since then have been hovering at the 170-180 cents a kilogram mark, which is close to the five-year average..there has been an increase in volume on last year but we are not being flooded by cattle, there are just less cattle in the system so prices have held reasonably well given the situation we are in," he said.

The Eastern States Medium Cow Indicator sat at 184.50c/kg yesterday, up 16c/kg on the same time last year, while the Eastern States Young Cattle Indicator is also trading at a premium year-on-year, up 17.25c/kg to 487.25c/kg - a jump of 18c/kg for the week.

Mr Gidley-Baird said while much of the market was now in a holding pattern until the spring, the restocker weight animal would experience more volatility than the heavy cattle and cow price.

"This is a reflection of people having sold all the excess cows they can at the moment, and are reluctant to let go of them, so volume of them coming onto the market is more consistent equating to more steady prices," he said.

"Restocker prices are more reflective of producers getting some rain, then not enough...there will be operators out there looking to gamble on finding feed and getting them up to weight, and the limited supplies are going to limit how far those lighter cattle will fall [in price] at the moment.

"Everyone is waiting to see in the spring break, as soil moisture and dam water levels are low, so until we get some decent falls and weather warms up producers won't be in a position to see if they should hold or increase numbers to then increase prices because of demand."

Ben Greenwood, Greenwood Livestock, Sale, said the region had received good rain in the past few days, but it had come very late.

"Rain has slowed turn-off down a little bit, we have a store sale this Friday with between 600 and 800 cattle, and we have had a few cancellations given the rain," Mr Greenwood said.

"We are heading into a pretty lean time in terms of available cattle coming into July/August as so many have sold already...we've also had a few people that were going to sell weaners but have decided to hold onto them and try feed through spring as they can see a shortage of cattle coming.

Mr Greenwood described the region's cattle turn-off as a "mass exodus" of breeding stock having left the area.

"We will need better than average seasons for the next couple of years, and then when it does break cattle prices will nearly be unbuyable so it will be a slow crawl back," he said.

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