November Meat Market Update

November Meat Market Update

The weather ahead:

  • BOM reporting that Oct-Dec 2016 will bring a 70% chance of heavier falls than average
  • El Nino weather pattern cycle complete. Now entering into weak La Nina cycle
  • BOM reporting a possibility of heavier falls than the devastaing weather (rain) events of Jan 2011
  • Up to 8 cyclonic events predicted (Nov-April)

Supplies of cattle:

  • 2014-2015 were back to back years of record slaughter and cattle turn off and result left a severely depleted national cattle herd
  • Now in 2016, the supply situation has been exacerbated by widespread rainfall across Australia’s largest cattle producing regions
  • Expectations are for extremely tight supplies to remain for the duration of 2016 and well into 2017 before slowly beginning to increase from 2018 onwards

Key points:

  • Tightest cattle supplies in 20 years. Record low slaughter numbers
  • Up to 40% herd decline in some areas of Central-Western Qld
  • Exports have reduced 24% YTD
  • 2017 Beef exports to decline further. Supplies to remain at home to try and cope with Australian domestic consumption
  • Wet summer ahead. Likely to have a major impact on re-herding and movement of cattle
  • Prices to taper to an average just slightly below current record highs
  • Beef carcase average weights up 3% YTD

Lamb:

  • Lamb slaughter numbers fell in Winter, down 4% on previous year at 1.8 million head
  • The widespread rainfalls have hampered slaughter numbers during the first part of the 2016 Autumn
  • Expectations are that numbers will begin to ramp up during the hotter months as a larger number (than expected) of Lambs become available
  • Prices will remain steady as demand continues to hold firm on both export and domestic markets

Pork:

  • Demand incredibly high for specific items such as Shoulder Ribs. Retail pork demand beginning to increase leading into warmer months
  • The oncoming Summer will put pressure on livestock numbers and have a resounding effect on supplies moving forward
  • Prices will begin to increase over the next 3-4 weeks. Increases likely to be around 5-10%, subject to supply

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