Queensland rebuilding offsets southern liquidating, herd in 'holding pattern'

Processors are certainly planning for increased numbers. Five major meatworks in the latter part of last year announced significant increases to capacity.

JBS Dinmore near Ipswich in Queensland, the largest beef cattle processor in the southern hemisphere, has just put on 300 additional workers to add a second shift.

If running at full steam, the extra investment made across all the five plants would equate to around a 15 per cent lift in Australia's total cattle slaughter capacity, analysts estimate.

There seems to be widespread agreement that slaughter rates, and therefore beef production, will continue to increase as 2024 rolls on but will that mean the Australian herd is liquidating?

Not necessarily. Much of the increased slaughter could be the result of a rebuilt herd, analysts say.

In fact, liquidation of the cattle herd on a national basis has already stopped and right now is in a holding pattern, prominent beef industry analyst Simon Quilty, Global AgriTrends, says.

Liquidation in Victoria, NSW, South Australia and Western Australia has been offset by rebuilding in the country's largest cattle state, Queensland, which has been blessed with widespread good rain.

The national female slaughter ratio is currently sitting at 46.9pc, just shy of the 47pc tipping point that signals herd contraction.

Mr Quilty believes the tentative nature of restockers to buy heifers in NSW and Victoria indicates a need for more confidence, which will come in the second half of 2024 and into 2025.

He said if a La Nina did emerge in June, which had been forecast by some weather agencies, then a wet back half of 2024 and 2025 would ensure widespread rebuilding.

NSW would be where the biggest drive for females would occur, as this was the state most impacted by dry conditions last year, he said.

"There is much talk of cattle in Queensland being held back at the moment, which I think is partly genuine and has indeed resulted in a carryover from last year," Mr Quilty said.

"But the same could be said for the beginning of 2023 when there was also a similar carry-over due to flooding in NSW."

Mr Quilty said it was important to note that the liquidation rate in both Victoria and NSW had slowed.

He also said the female kill rate in Victoria was likely higher due to excess females coming from NSW. Without that element, Victoria would be in rebuild already, he said.

Mr Quilty said carcase weight data was indicating growing conditions in many parts of Australia had improved - and this was an essential precursor to a rebuild commencing.

Australia's overall carcase weight rose in the final quarter of 2023 to 313 kilograms, slightly up from 309kg in the previous quarter, Australian Bureau of Statistics data showed.

Mr Quilty said some points to note were that Queensland carcase weights were at 327kg, given that November to January was wet - in the top 10pc of highest rainfall over 120 years in fact.

"I believe the increase in grassfed weights offset the fall in numbers in feedlots and, therefore, carcase weights remained steady," he said.

Victoria's carcase weights jumped by 18kg to 304kg, the largest in any state.

"This was also driven by exceptional rain, with November to January being the third most significant rainfall in 120 years.

"If it wasn't for the lighter females from NSW being slaughtered in Victoria, this weight might have been even higher."