The combination of an expanding cattle herd and the dry start to the year is likely to see Australian adult cattle slaughter rise 3.7 percent for 2013, Meat & Livestock Australia suggests in its Industry Projections released yesterday.
If the national kill reaches the predicted level of 7.67 million head, it will be the highest level seen since the drought-impacted 2008 year (7.85 million head).
One of the notable features of this year’s kill could be a big lift in the rate of females sent to slaughter, especially if conditions remain dry across large areas of Eastern Australia. MLA predicts the cow and heifer portion of the total kill this year to reach 46pc, the highest since 2008.
In contrast with last year when rates of kill reached a peak during the fourth quarter, 2013 is likely to see a busier first and second quarter for processing activity, tailing-off somewhat, in percentage terms, as the year progresses.
After the run of drought years between 2002 and 2009, followed by two of the wettest years on record in 2010-11, annual slaughter has, in most years, been dictated by seasonal conditions, with a weaker influence from market prices or herd size.
Especially in 2010 and 2011, much of the predictable seasonality in slaughter was disrupted by the unprecedented run of wet conditions, with an inability to deliver animals to market or processors due to flooding one of the big challenges.
In 2011, slaughter fell to its lowest level since 1996, at 7.26m head, following a previous decline in 2010. The widespread breaking of the eastern Australian drought in 2010 saw many producers withhold cattle from sale – male cattle to make the most of the improved feed scenario and females to commence herd rebuilding.
As the wet conditions continued throughout 2011 and 2012, the efforts to retain male cattle waned somewhat, as producers started to turn-off very well finished steers, while the emphasis on female retention for rebuilding was maintained.
Busy start to year likely
Given the very dry finish to 2012 and forecast for a dry summer/autumn in 2013, combined with the larger cattle herd, MLA anticipates slaughter rates for the first quarter of 2013 to be closer to the five-year average of the 2005-2009 drought period (1.88m head), rather than the very wet three year period between January 2010 and June 2012 (1.74m head).
Like the first quarter of 2013, and heavily based on the assumption of average seasonal
conditions, at best, cattle slaughter in the second quarter is also expected to be above the corresponding periods in 2010-2012 and closer to the ten year average.
For the wet years of the recent past, average slaughter in the second quarter averaged 1.89m head, compared to 2.059m in the preceding five drier years to 2009.
Total cattle processing throughput for 2013 is forecast to increase 3.7pc, or an estimated 275,000 head, with a large portion of that expected to be registered in the first half of the year.
“However, it should be again emphasised that this is based on the forecast for average to below average, rainfall during the first half of the year, which will also significantly slow the momentum behind the herd expansion which started in 2010,” yesterday’s Projections report says.
Additionally, the year-on-year percentage increase in turnoff for the two quarters is compared against the historically low level of 2012, with the increase bringing it closer to the long term average for each quarter.
In 2013, adult cattle slaughter for the third quarter is expected to be up slightly on the high 2012 levels. In 2012, it was the final quarter of the year, when the effect of the very dry and hot finish to the year became evident, that adult cattle slaughter really gained some momentum.
While final fourth quarter official numbers won’t be available until mid-February from the Australian Bureau of Statistics, National Livestock Reporting Service weekly average slaughter survey data suggests cattle slaughter for October-December last year reached 1.95m head. That would be the highest quarterly result since the second quarter of 2010 (1.99m) and the highest fourth quarter total since 2008 (1.96m).
Indeed, it was the final quarter of 2012 with an estimated year-on-year increase of 7pc that added the overwhelming bulk of the 1.9pc increase in slaughter numbers for the year.
Given the jump seen in the final quarter of 2012, any percentage increase in adult cattle slaughter for the final quarter of 2013 is expected to be limited, MLA says. Thus given higher slaughter rates in the first half of 2013, and sustained rates in the second half of 2013, total throughput is forecast to reach 7.675 million head – up 3.7pc year-on-year.
Of this total, female cattle are estimated to rebound to around 46pc of the national kill, or 3.53 million head, taking plenty of momentum out of the herd expansion from the previous two years.
With female and male slaughter forecast to be higher in subsequent years, Australian adult cattle slaughter through to 2017 is expected to increase, albeit at a decreasing rate.
Another forecast increase in slaughter numbers in 2014, forecast to reach 7.85m head, would almost bring the past three years of herd expansion to an end, MLA says, with the national herd plateauing at 30m head.
In subsequent years, adult slaughter is projected to increase to 8.2m head by 2017 (10.8pc above 2012), which will also start to bring the national herd back below 30 million head.
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