Technical information - General

MLA cattle industry projections 2012

BRAHMAN NEWS MARCH 2012 ISSUE #174

Meat & Livestock Australia www.mla.com.au

Continued strong demand from an increasingly diverse range of global markets will combine with favourable seasons to drive an expansion in production and exports in 2012, according to Meat & Livestock Australia's 2012 cattle industry projections released today.

MLA Chief Economist Tim McRae said total Australian beef and veal production for 2012 is forecast to reach a record 2.197 million tonnes cwt, up 2.2%, as good seasons result in heavier than average carcase weights.

"A major factor assisting the growth in Australian beef production has been the heavier carcase weights on the back of good seasons. The influence of higher marking rates since 2010 will be reflected in cattle turnoff and beef production in the coming years."

Mr McRae said while cattle numbers will increase, supply will remain relatively tight compared to the herd liquidating drought years of the past decade.

"Another favourable year, feed-wise, for producers should see herd rebuilding continue to limit female turnoff, while producers will compete for young cattle for finishing. This will present challenges for the grain feeding sector."

"Global demand for beef is expected to be sustained, if not strengthen – particularly in Asia, South America and the Middle East – while at the same time global beef prices are tracking at historically high levels. Such factors will help to dampen the impact of the high A$."

"Total beef exports are predicted to increase, driven by expansion into Russia, the Middle East and most southern Asian markets. Traditional export markets will continue to be challenging, with the exception of the US market which is forecast to improve in 2012, as high prices attract additional product, reversing almost a decade of falling Australian shipments"

"The outlook for the live cattle trade in 2012 continues to be dominated by prospects to Indonesia, with total exports currently forecast to decrease 16% in 2012. The pressure on the Indonesian market, combined with generally good seasons, may see cattle again heading south for processing, easing the expected tight supplies. This will depend largely on the seasons across the north, particularly western Queensland, remaining favourable and the finish to the 2011-12 wet season."