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Australian Cattle Council : Yearbook 2015
YEARBOOK2015 CATTLE COUNCIL OF AUSTRALIA 30 Aussie Beef Production Set To Tighten The Australian cattle market has had an extraordinary year in 2015, with cattle prices continuously finding new highs, despite ongoing feed and water shortages in many of Australia’s key beef producing regions. Driving the unprecedented market has been strong international demand for Australian beef. The US is in the wake of drought induced herd liquidation, leaving cattle numbers at the lowest point in 60 years and subsequently, beef production at a 20 year low point. This in particular has gone a long way to supporting the Australian beef and cattle markets. In fact, in 2015, Australian beef exports to the US will exceed all previous records, and will be the single largest destination for Australian product. Also assisting the competitiveness for Australian beef in the US has been the constant weakening of the A$, which commenced 2015 at 81US¢, and is presently hovering 70US¢ – the lowest value since 2009. Further assisting the Australian cattle market in 2015 has been strong demand from Japan and Korea, where tariff reductions are aiding beef export demand, with shipments to each market higher year-on-year. Demand from China has also been strong, with shipments steady, while some of the developing markets in South- east Asia and the Middle East have seen volumes decline. Back at home, Australian cattle processing commenced 2015 fuelled with the same momentum that 2014 finished with weekly slaughter breaking record after record, before peaking in April at 180,000 head. Since then the number processed each week has been declining, yet through to the end of September remains at approximately 155,000 head, well above the five-year average of 137,000 head. Looking forward and considering that by the time 2015 is over Australia will turn-off over 9 million head for the third consecutive year (cattle slaughter plus live exports), for the first time ever, the cattle herd is forecast to dip to a 20 year low in 2016, at 26.1 million head. This will flow on to tight beef production, particularly from 2016-18 as rebuilding is expected to take place, assuming seasonal conditions are favourable. The 2015 cattle market was largely driven by strong international beef demand, which is likely to remain in 2016. Adding fuel to the demand side of the equation in 2016 will be restocking interest if a widespread break occurs, combined with the subsequent reduction in cattle available for sale. This will be great news for producers with cattle to sell and expensive for those looking to re-enter the market. BEN THOMAS Manager, Market Information Meat & Livestock Australia The 2015 cattle market was largely driven by strong international beef demand, which is likely to remain in 2016.