A change in methodology introduced by the Australian Bureau of Statistics for its latest Ag Census means that about two million cattle have not been counted in its latest estimate of Australian cattle numbers, released on Friday.

The change appears to be a key explanation for why ABS’ estimate of the size of the total Australian cattle herd as at June 30. 2016, released in its Ag Census data on Friday, was well below MLA and ABARES’ estimates of herd numbers at the same date.

Every five years the ABS conducts a survey of agricultural operations across Australia to provide raw data on industry production levels, including the number of cattle across the country.

In its latest survey conducted for the 2015-16 financial year, the ABS lifted the size of operations it included in its census from those with an estimated value of agricultural operations (EVAO) of at least $5000, which were included in previous Ag Census data, to those with an EVAO $40,000 or above.

The change has had a significant impact on the number of farms now counted in the data.

Raising the bar from an EVAO of $5000 to $40,000 may not seem like a big jump, but it means that many smaller farms or hobby farms running say five or 10 cattle each are no longer included.

Extrapolated nationally, the change means that farms carrying about 7 percent, or 2 million head, of the national cattle herd, which were included in previous surveys, were not captured in this census, and will no longer be accounted for in future surveys.

Beef Central understands that the main reason given for the change was resourcing. Raising the entry level to an EVAO of $40,000 effectively means ABS can survey approximately 20 percent fewer farmers.

The raw data from ABS surveys serves as the basis for all other industry herd and production estimates and means that Meat & Livestock Australia and ABARES will have to re-calibrate their own assessments of livestock populations and associated production forecasts.

MLA’s approach to determining herd numbers uses the ABS figure as a starting point but then takes into account feedback on current seasonal conditions, conception rates and calving rates etc from pastoral companies and producers across Australia.

The size of the herd is only one of several production measures MLA reports on. Equally important, and perhaps more important, are its assessments of expectations around cattle slaughter and in turn beef production and beef and cattle exports going forward.

MLA’s manager of market information services Ben Thomas said MLA has assessed five years of herd data under the new methodology ABS has now adopted to see how it would have affected previous herd estimates.

It shows that about two million head of cattle will no longer be captured in the raw data ABS now provides.

“It is a shame, because the more data the better,” Mr Thomas said.

“While I do understand the justification that the ABS has cited, it is a bit disappointing to know there are effectively going to be about two million cattle each year that will not be accounted for in the surveys.

“We will be able to recalibrate our models going forward, and I am sure ABARES will do the same, but it does mean we are going to be operating with a greater margin of error than would previously have been the case.”

MLA also recently increased the frequency of its projections from half-yearly to quarterly, to account for variations in seasonal conditions which can change production estimates and forecasts quickly.

“One of the main reasons why we go to the effort we do with the beef projections is that it is not really the ABS’ place to be forecasting what to expect over future years,” Mr Thomas said.

“But certainly is to provide base data which gives us an indication of where we are at, and certainly the more timely that information is the better.

“Such an important part of what we do in the market information team is to take those raw numbers and put more meaning around them.”