Elders : Finding the new norm in global livestock prices

Figures from the Australian Bureau of Statistics for cattle and sheep reveal changing fortunes in Australia's beef herd and sheep flock.

The beef herd has gone into a holding pattern, with the female slaughter at 46.9 per cent (pc), just shy of the 47 pc breakeven, while the Australian sheep flock continues to liquidate with the mutton kill (which reflects the female kill) at a 10 year high.

When assessing the Q4 female cattle killed by each state - four states are in liquidation - NSW, VIC, SA and WA, but with QLD and TAS rebuilding, this has offset the other states, giving Australia a neutral rebuild outcome.

These figures set the stage for a rebuild that will likely commence late this year in cattle and next year in sheep. Either way, 2025 to 2027 will be a significant year in livestock retention and assisting both cattle and sheep prices move to record levels.

When comparing finished cattle prices around the globe, Australia sits third in its value, behind Brazil and the US.

• US finished cattle is sitting at 600 ac/kg liveweight (LW) equivalent.
• Brazil is at 445 ac/kg LW equivalent
• Australia is at 390 ac/kg LW equivalent

I believe all three countries cattle are undervalued, with Australia having the greatest upside in improvement over the next three years.

Australian cattle forecasts over the next seven years

Australia's liquidation has slowed to a neutral state, neither liquidating nor rebuilding. The definition of Australia's herd rebuilding or liquidating is when the female kill rises above or below a 47 pc kill ratio; when females go above 47 pc, liquidating occurs, and when below, rebuilding occurs.

Queensland received significant rain from November to January, which was in the top 10 pc of 120 years of rainfall records. During the same period, NSW rainfall was in the top 20 pc and Victoria in the top 2 pc over the same period.

So, conditions have improved, and therefore, liquidation has slowed. Given Victoria's massive rainfall, a rebuild has been happening, but due to the excess females from NSW, it has given the impression of liquidation.