THE great grass-fueled rebuild that has seen restockers push the market to phenomenal heights is now officially over and the Australian herd is on track to reach its highest level since the 1970s by 2025.
Meat & Livestock Australia's first cattle industry projections for 2023 says the good rainfall that arrived last year will ensure solid supply of both young and slaughter-weight cattle over the next two years, regardless of what the weather does now.
Those increased numbers are now beyond rebuild status. The herd is forecast to reach 28.8 million head this year - up 1.1m on last year - and a phenomenal 29.6m head in 2025.
That supply, and a decreased urgency from restockers to get their hands on stock, will place downward pressure on the market.
However, that should be somewhat offset by increased feedlot demand as the drop in input costs incentivises the filling of what is now record capacity in Australian pens.
Industry analysts are forecasting the Eastern Young Cattle Indicator to be 811 cents a kilogram carcase weight by the end of June, which is up on today's rate of 785c.
MLA is forecasting the National Feeder Steer Indicator to trend upwards and sit at 419c/kg live weight at the end of June, which would be 8.5 per cent above the five-year average.
The increased supply of cattle should flow through to an uptick in slaughter to 6.625m head however MLA has recognised the labour crisis in plants that is showing no signs of easing.
Without an improvement in the situation, MLA's analysts say more than half a million head ready for market might not be processed this year.
What happens to those cattle? They grow out to heavier weights but at some stage they have to be moved on, whether or not the market wants them.
MLA senior market information analyst Ripley Atkinson: "Cattle will fall out of specification and the more broader impact will be on Australia's ability to provide specific product to markets.
"On-farm the implications will be around producers' ability to manage their land and carrying capacity.
"We've never really seen a scenario like that before."
The herd growth to 2025 would eventuate regardless of seasonal conditions, Mr Atkinson said.
It will be underpinned by the record retention of females that has occurred, the big calf drops and improved genetics across the herd alongside sound on-farm management, he said.
Added to the mix is the expected good availability of feed and water for the next 12 months.
With strong supply coming down the pipeline, if we are able to process the cattle the big question is will the global market accommodate it?
MLA has flagged changing international supply dynamics as presenting significant opportunity.
"The contraction in US supply coupled with its large domestic market will likely see it switch from being a net exporter of beef to a net importer this year," Mr Atkinson said.
That decreased US competition would position Australia well in key markets like Japan and South Korea, and also in the US itself, he said.
This could assist in maintaining unit prices, even if global demand for beef softens.
MLA's market information team will run the annual live webinar presenting the forecasts for the cattle herd and market in 2023, on Thursday at 11am AEDT. To register click here.