livestock
Beef Cattle
- GVP $3,1870 million est. Up 15.8% year-on-year.
- Herd rebuilding significantly impacted cattle available for slaughter leading to lower production.
- Prices for all categories of cattle reached record highs during the year.
With herd rebuilding gaining significant momentum, beef prices for all types of cattle surged to new record highs during the year. Despite the high prices, production fell to a record low as producers held onto any cattle they owned, in particular females. The female slaughter rate in NSW fell to a record low of 41% for the year.
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Despite the fall in production however, the gross value of production increased as price rises more than offset the decline in production. Intense competition for breeders and future breeders pushed prices for females to record highs. Likewise, the difference in cents paid per kilogram for light restocker type steers relative to finished heavy steers reached record highs.
NSW Beef Female Slaughter ratio (year end 30 June) 196
- NSW Female Slaughter ratio
Production
Overall production continued to fall reaching record lows during the year. Total cattle slaughtered fell 2.8% to 1.3 million – the lowest on record.
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However, average carcase weight also reached a record high, rising 4% year on year to 318 kg/cwt, which was 9% above the 10-year average.
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This partially offset the fall in numbers slaughtered and production fell 0.2%
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lower than at any time since the 1980’s.
NSW rolling 12 month beef slaughter and production 196
- Rolling 12 month production (LHS)
- Rolling 12 month slaughter (RHS)
Price
With lower supply, prices continued a record run for all types of cattle. Overall average volume weighted prices (for slaughter ready stock) rose by an estimated 17% during the year. Despite a record high discount between slaughter ready/heavy steers and feeder steers and between feeder steers and light steers there was continued to be significant restocking demand.
The difference between restocker steers and heavy steers reached $3.36 kg/lwt during the year.
The Eastern Young Cattle Indicator (EYCI) smashed through $10/kg cwt eventually peaking at $11.91/kg cwt.
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On average the EYCI was up 29% year on year.
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Demand for breeders was also very strong with average prices for cows and calves up 27% and pregnancy tested in calf (PTIC) cows and heifers up 28% to 29%.
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Index of prices for Australian farmgate beef prices, various categories 211 232
- PTIC Cows & Heifers
- Restocker steer
- Feeder steer
- Heavy steer
Trade
Although production was lower, the value of NSW’s beef exports increased 25% to $1.9 billion thanks to an 28% increase in export prices.
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Export prices began recovering at the end of 2020-21 and this recovery continued for most of 2021-22. The volume of exports fell 3%.
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Higher export prices alleviated some of the pressure on processors who were paying record high farm gate prices as well as battling labour availability issues and higher energy costs.
Exports to China recovered increasing 58% year on year to $787 million. 35 China’s share of total NSW beef exports increased to 41% - a record high.
Whilst trade tensions with China remain – there was a global shortage of beef during the year with production disruptions in the United States (US) due to COVID-19 and an export ban in Argentina which meant that most importing countries were struggling to secure supplies. As the year progressed, however, increased supplies from the US as productions difficulties resolved and due to a significant drought in some of the country’s major beef production regions increased global supply and competition. There were reports of some pressure on export prices towards the end of the year however prices remained high by historical standards supported by a weaker Australian dollar.
NSW’s own exports to the United States (US) fell 25% in volume terms though rose 3% in value terms
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thanks to a 36% increase in the unit price. Most Australian beef exports to the US are grinding meat which is primarily sourced from cows. Given the strength of the Australian herd rebuild resulting in significantly fewer cows slaughtered as well as an increase in domestic US cow slaughter due their drought a significant fall in exports to the US is unsurprising.
NSW Beef exports by destination 35
- China
- Japan
- Korea, South
- United States
- Netherlands
- Saudi Arabia
- Other
Outlook
Towards the end of the year some emerging caution tempered farmgate prices, despite a continuation of excellent seasonal conditions. Supply of cattle is slowly increasing, and processors are struggling with significant labour shortages which is creating challenges in lifting slaughter capacity. Shipping constraints and continued lockdowns in China are adding uncertainty. Dry conditions in the US are also lifting US supply and increasing competition in a number of Australia’s key markets. In early 2022 the US female slaughter ratio exceeded 52% which is a record high.
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The US has been able to take advantage of reduced Australian supply and improved trade relations with China to increase its market share in Australia’s three key strategic markets, Japan, China and South Korea. Whilst, in the short term, this trend is likely to continue, at some point seasonal conditions will improve in the US and production will fall just as it did in Australia following the recent drought. High global prices are also encouraging high slaughter rates in most major beef exporters. International demand for quality beef remains robust despite high prices. Whilst increasing domestic supply may see farmgate prices fall from record highs, strong prices by historical standards are likely to be maintained well into 2023.
Stronger Primary Industries Strategy
The Southern Multi Breed (SMB) project
The Southern Multi Breed (SMB) project is a $7.3m collaborative research and development project involving NSW DPI and the University of New England. The project is conducted on five NSW DPI research stations, and the UNE Tullimba Research Feedlot over the five years, 2020 to 2025.
Strategic Outcome
Economic Growth
High-quality records on hard to measure traits that have important impacts on beef herd profitability will be recorded as part of this project. These include immune competence, growth, feed efficiency and multiple aspects of female fertility.
The development a multi-breed evaluation from this foundation data means commercial producers looking to buy bulls for example, will ultimately be able to select the right bull for their operation, irrespective of the breed. New traits will also be recorded throughout the life of the project, giving seedstock and commercial bull buyers' access to EBVs for a wider range of traits that impact commercial profitability.
For more information, visit www.dpi.nsw.gov.au/smbproject
