By Angus Brown | Source: ABS, MLA, Mecardo.
The Australian Bureau of Statistics (ABS) has released the latest official cattle slaughter data. The trend of stronger slaughter continued, with drought no doubt the driver. The most interesting figures were again out in the female slaughter numbers, indicating a third month of herd liquidation.
After a relatively benign start to the year national cattle slaughter ramped up in April and this has continued through to July. The four months from April to July saw 12.5% more cattle slaughtered than last year. This took year to date to 10% above last year, but still 5.5% below the five-year average.
Figure 1 shows that the May to July slaughter figures are not far from the five-year average. It should be noted that the five-year average is bolstered by the huge slaughter rates of 2013 to 2015. If we discount the 2013-2015 period, cattle slaughter for May to July was as strong as it has been since the late 1970s.
Females have made up a larger proportion of the increased slaughter. For the first 7 months of the year, 21% more cows and heifers were slaughtered, in July the lift was 29% on last year’s levels.
As a proportion of cattle slaughtered, females have been running at record levels. For the four months to July, female slaughter has averaged 53.3% of the total. This is even higher than those seen during the 2014-15 drought (Figure 2).
By Angus Brown | Source: ABS, MLA, Mecardo
The Australian Bureau of Statistics (ABS) has released the latest official cattle slaughter data. The trend of stronger slaughter continued, with drought no doubt the driver. The most interesting figures were again out in the female slaughter numbers, indicating a third month of herd liquidation.
After a relatively benign start to the year national cattle slaughter ramped up in April and this has continued through to July. The four months from April to July saw 12.5% more cattle slaughtered than last year. This took year to date to 10% above last year, but still 5.5% below the five-year average.
Figure 1 shows that the May to July slaughter figures are not far from the five-year average. It should be noted that the five-year average is bolstered by the huge slaughter rates of 2013 to 2015. If we discount the 2013-2015 period, cattle slaughter for May to July was as strong as it has been since the late 1970s.
Females have made up a larger proportion of the increased slaughter. For the first 7 months of the year, 21% more cows and heifers were slaughtered, in July the lift was 29% on last year’s levels.
As a proportion of cattle slaughtered, females have been running at record levels. For the four months to July, female slaughter has averaged 53.3% of the total. This is even higher than those seen during the 2014-15 drought (Figure 2).
If we project slaughter forward for the rest of the year based on historical seasonality, annual slaughter will hit 7.85 million head, with 3.99 million of these being female. Based on MLA’s herd estimate for the start of the year, female slaughter will be 14.5% of the herd (Figure 3).
Figure 3 shows that 14.5% is the highest relative female slaughter since 2003 (apart from 2014 and 2015). When female slaughter moves above 14%, the herd generally declines.
Key points
* The latest ABS slaughter data shows strong overall, and female slaughter being maintained.
* If strong female slaughter continues for the rest of the year the herd is likely to decline 1-4%.
* A 2% fall in the herd will see it hit similar lows to those reached in 2016.
What does this mean?
The strong slaughter rates of recent months look likely to continue. If this happens, we can expect the herd to take a hit. While we won’t see the 6% fall of 2015, the strong female slaughter should see a herd decline between 1% and 4%. The magnitude of the decline heavily depends on marking rates in Queensland.
A 2% decline in the herd will see it fall back to 2016 lows and we all know what that did to cattle prices when the rain finally came.
If we project slaughter forward for the rest of the year based on historical seasonality, annual slaughter will hit 7.85 million head, with 3.99 million of these being female. Based on MLA’s herd estimate for the start of the year, female slaughter will be 14.5% of the herd (Figure 3).
Figure 3 shows that 14.5% is the highest relative female slaughter since 2003 (apart from 2014 and 2015). When female slaughter moves above 14%, the herd generally declines.
Key points
* The latest ABS slaughter data shows strong overall, and female slaughter being maintained.
* If strong female slaughter continues for the rest of the year the herd is likely to decline 1-4%.
* A 2% fall in the herd will see it hit similar lows to those reached in 2016.
What does this mean?
The strong slaughter rates of recent months look likely to continue. If this happens, we can expect the herd to take a hit. While we won’t see the 6% fall of 2015, the strong female slaughter should see a herd decline between 1% and 4%. The magnitude of the decline heavily depends on marking rates in Queensland.
A 2% decline in the herd will see it fall back to 2016 lows and we all know what that did to cattle prices when the rain finally came.
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