AUSTRALIA –Australian livestock production and supply have been reporting exceptionally low levels in the past twenty years but according to a report by the FAS, the industry is anticipated to recover in 2023 with herd restoration among other developments.

The national cattle herd has gradually deteriorated over the past years mainly on account of a major drought that has plagued the country for a while.

The report however forecasts that cattle production will increase by 8% in 2023 as compared to the prior year.

A rapid degree of herd rebuilding has been witnessed in the country, enabled by excellent seasonal pasture production conditions across the major beef-producing regions.

Milk production has however suffered a 7% decline in the last two years despite the good seasonal conditions and record-low milk prices.

According to the report, dairy farmers attributed this to inadequate labour as well as a number of them transitioning from dairy production to beef production on account of the more lucrative beef prices.

The report also predicts an increase in cattle slaughter by 586,000 head to 6.7 million head in 2023, as compared to the 6.11 million head slaughtered in 2022.

This prediction is on account of good seasonal conditions which have led to good grass production and encouraged the retaining and growing of cattle.

The report also forecasts cattle exports in 2023 to increase moderately to 750,000 head from the 592,000 head exported in 2022.

According to data from the FAS, the rate of exports considerably slowed down in 2022, on account of very high livestock prices.

Additionally, in May 2022 Australia’s main live export trade partner, Indonesia, announced the detection of cases of foot and mouth disease in the country.

Export trade, therefore, deteriorated considerably in 2022 but it has more recently shown signs of improvement with cattle prices slightly decreasing in the northern regions of Australia.

The FMD outbreak in Indonesia on the other hand is yet to be fully managed but there have been reported signs of improvements.

Higher production levels to prompt higher consumption levels

In matters of production, the FAS/Canberra report projects that 2.05 million metric tons of beef will be produced in 2023, reflecting a 9% increase from 2022.

There has been a growing interest in expanding feedlot capacity in the country over the last couple of years. In the previous five years alone the capacity has increased by 18%.

Over the same period, the number of cattle on feed has also risen by 14% inevitably leading to an overall increase in beef production.

The nation is expected to consume about 675,000 metric tons in 2023. This estimate is about 3% higher compared to the amount of beef consumed in 2022.

The anticipated slight increase in consumption is primarily related to the forecast increase in production.

If actualised, this would be the highest consumption level since 2019 and therefore the competitiveness of beef compared to other sources of animal protein is expected to improve in 2023.

China’s reopening to boost Australian beef exports

According to the report, beef exports are also projected to increase to 1.4 million tonnes from the 1.24 million tonnes exported in 2022.

Despite the predicted increase, the amount will still be much lower than the 1.7 million tonnes exported in 2014. 2015 and 2019. These were the peak years in export rates.

Analysts anticipate that drought and subsequent herd rebuilding in the United States in 2023 to reduce competition for Australia in third-country markets, especially in Asia.

China, the world’s biggest importer of beef, is reopening after the pandemic. In the last 10 years, Australia counted for about 53% of china’s beef imports but the value has since fallen to 7%.

With China lifting its COVID restriction policies, there has been extraordinary growth in its imports as well as reported signs of improving trade relations.

The report, therefore, predicts an opportunity for increased Australian beef exports to China as supply from Australia begins to improve in 2023.

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