In 2022, the cattle market in Australia continued to experience operating conditions on-farm that are considered exceptional. By understanding the cattle market trends and demand in Australia and other countries, investors will be ready to invest in this industry.
In 2022, there were three key hallmarks, the first one is the intense demand between feeder buyers and restockers. It is driven by confidence in the season and the tight cattle supply. Another hallmark is the greater quality selectivity. And the last one is the operational and logistical challenges due to Covid.
Understanding the Cattle Market Trends and Demand
The FSR or female slaughter rate is the key statistical indicator that shows how the herd rebuilding process is performing. This technical lead indicator is measuring the number of female cattle that are being processed every quarter.
The STR or stock turn-off ratio is measuring the number of cattle that are processed and also sent to live export. This STR is used as the lead indicator as well, for animals’ retention to rebuild numbers and also with lower live export and slaughter volumes expected for last year. What are other details to know?
The first thing to know if you want to invest in cattle is about national yards. Total national yardings for 2022 experienced a decrease of about 256,000 head or 12.4% compared to volumes in 2021. It is also softer by 1.44 million head or 45% in the drought year of 2018.
All states experienced declines with WA, Victoria, and Queensland registering the biggest falls. They soften in year-to-date terms by 36,124, 74,626, and 92,957 compared to the previous year.
Numbers on feed in 2022’s quarter 3 were 83,000 head or 9% higher than the 10-year average. In the same quarter, national capacity hit 1.51 million head. It is a new record and it sat 8% above the average of 5 years.
Before invest in cattle, note that in 2022, the production of grain-fed has produced on the average 50% of the total beef being produced in that country. It is 12% above the average in 10 years.
The average weekly slaughter in year-to-date terms has lowered by about 23% compared to 2020 and 3% compared to 2021. Cattle supply has continued to stay tight with the rebuild that’s extending north in Queensland so the cattle numbers fell further.