Widespread rainfall since February is expected to fuel national beef cattle herd rebuilding for the first time in three years, according to Meat & Livestock Australia's (MLA) Cattle Industry Projections April update.
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Vastly improved conditions, combined with a positive rainfall outlook, has led to a forecast adult cattle slaughter for 2020 of 6.9 million head, a drop of 19% on 2019.
MLA Senior Market Analyst, Adam Cheetham, said for the first time since 2017, many producers are now in a position to seriously consider rebuilding depleted herds, particularly across southern Queensland and NSW.
"From a cattle supply perspective, the impact of improved conditions on producer intentions is anticipated to see cattle turnoff decline to the lowest point since the mid-1990s and remain at historically low levels for the next two years," Mr Cheetham said.
"The flow-on effect of a sharp contraction in adult cattle slaughter has seen a decline of 16% in the national beef production forecast to 2.05 million tonnes carcase weight (cwt), with increasing carcase weights only offsetting some of the decline in slaughter.
"National adult carcase weights are forecast to lift 10.4kg to average 294kg/head in 2020.
"Intense competition for store cattle will challenge the lot feeding sector and the number of cattle on feed is anticipated to ease, limiting the upside potential for average carcase weight gains."
Looking at exports, Mr Cheetham said amid the turmoil and uncertainty surrounding the impact of COVID-19, beef exports are forecast to reach 990,000 tonnes shipped weight (swt), back 20% on last year.
"The impact of COVID-19 on each country's red meat market will be shaped by many factors including its dependence on imports, level of disposable income, the prominence of red meat in consumer diets, as well as many evolving factors, such as the level of restrictions imposed by governments.
"The impact on the meat industry from COVID-19 is impossible to predict, but is likely to include an Australian and global economic downturn, a significant reduction in foodservice demand and reduced demand for higher value meat cuts.
"Critically, China appears to be emerging from their COVID-19 shutdown, with strong meat import demand beginning to return. However, the crisis has escalated across the rest of the world and will continue to disrupt supply chains and the consumption of Australian red meat around the globe in coming months.
"Australian cattle prices are expected to maintain a certain level of support for the next 12-18 months, given limited domestic supply and strong restocker demand."
