The USDA’s Foreign Agricultural Service Monday forecast Australian beef supply to recover in 2024 to the point of reaching the sixth highest production on record.
A report from the FAS’ office in Canberra, Aus., said the 2024 forecast came after a significant turning point in 2023, where production was estimated to grow by 16% from the lows of 2021 and 2022, a rise not seen in 25 years as herd rebuilding neared completion.
Beef exports were forecast to reach the fourth highest on record in 2024 and regain some market share in three of its biggest Asian market destinations, the FAS said.
Australian pork production was forecast to increase slightly in 2024 after strong growth in 2023, the report said. The result would be a slight increase in exports and lower-than-usual imports.
Pork imports from the US were expected to revert to past dominance of in excess of half of overall imports, the FAS said.
CATTLE HERD REBUILD
Cattle herd rebuild in Australia is nearing completion as the growth in female slaughter rates in 2023 is approaching the long-term average, the FAS said. With increasing supply of beef in 2023, cattle prices have fallen by more than 40% since the end of 2022. Declines in retail beef prices are beginning to be seen in the second half of 2023 and were expected to continue into 2024.
That is expected to support beef consumption for 2024, despite the increasing cost of living pressures affecting Australian consumers brought about by a widening gap between high inflation and wage growth, the report said. The lower beef cattle prices were forecast to support a 36% growth in live cattle exports for 2024, although this is from a very low level in 2023.
Beef exports were forecast to reach the fourth highest on record in 2024 at a time when US beef production and exports are expected to decline as the industry continues its own herd rebuild after drought, the FAS said. The main beef export destinations for both nations are China, Japan and South Korea. Australia will have the opportunity to regain some of the market share it lost in recent years when its export supply was low.
HIGHER PORK PRODUCTION
Australian pork production was forecast to increase slightly in 2024 after strong growth in 2023, which was spurred by the rapid rise in beef and lamb prices in Australia, the report said. This will result in a small increase in exports but more so lower-than-usual imports.
US pork import costs have reverted to being lower than from the EU during 2023 and is expected to continue into 2024, the FAS said. So, imports from the US were expected to return to past dominance.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $178.95 per cwt to $187.74, compared with last week’s range of $178.95 to $187.74 per cwt. FOB dressed steers, and heifers went for $279.95 per cwt to $289.11, compared with $282.62 to $289.11.
The USDA choice cutout Wednesday was down $0.48 per cwt at $307.55 while select was up $3.41 at $287.19. The choice/select spread narrowed to $20.36 from $24.25 with 123 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.70 a bushel over the Dec corn contract, which settled at $4.82 1/4 a bushel, up $0.05 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $251.16 per cwt, up $0.28. This compares with Wednesday’s Sep contract settlement of $253.50 per cwt, down $1.82.