The Department of Agriculture, Fisheries and Forestry’s Livestock Industry Outlook 2023-24
The Department of Agriculture, Fisheries and Forestry (DAFF) plays a crucial role in enhancing Australia’s agricultural, fisheries, and forestry industries. Their Agricultural Commodities Report, based on forecasts by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), provides valuable insights for Australian producers, helping them understand the value of their produce and assess risks. The recent ABARES 2023-2024 Livestock Outlook Report presents a comprehensive outlook for the livestock sector, highlighting opportunities and challenges for the coming year.
This post summarises the key findings from the industry report, including global supply and demand trends, and discusses how genetic testing can empower decisions to help navigate the year ahead.
Value of production and price movements
The forecast predicts a slight 2% decline in the gross value of production, reaching $34.6 billion in 2023-24. Lower prices across multiple livestock and livestock product categories (beef, veal, live cattle, milk etc) are contributing to this decline, offsetting the impact of higher production levels. Average sale yard prices for cattle, sheep, and lambs are expected to decline, reflecting rising turn-off rates and lower restocking demand. Additionally, the rising global supply of beef and sheep meat from Australia and Brazil is likely to outweigh the stronger demand from China and the United States, likely resulting in a drop in global prices that will impact Australia’s red meat industry. The value of wool production however is projected to increase due to rising wool prices driven by increased Chinese demand following falling shipping costs, the lifting of pandemic restrictions and improved processing capacity in China.
Export volumes
Despite the decline in export values for most livestock and livestock products, the sector’s exports are expected to remain elevated at $26.9 billion in 2023-24, primarily due to rising export volumes. However, international price competition, especially in beef and veal, may challenge export prospects.
Weather changes
Drier conditions are expected later in 2023-24 due to the potential onset of El Nino, and a positive Indian Ocean Dipole (IOD) event. This is expected to reduce pasture availability and increase supplementary feed prices, prompting higher cattle turn-off rates. Nonetheless, the rise in domestic beef production is expected to drive higher export volumes for Australian beef. Similarly, sheep meat production volumes are forecasted to grow by 2% in 2023-24, fuelled by increased slaughter rates and recently favourable seasonal conditions. These higher production levels are anticipated to meet the growing demand from China, boosting export volumes for the livestock industry.
International competition
The livestock and livestock product markets are expected to face increased international supply and competition in 2023–24, resulting in a drop in prices. This rise in beef supply is driven by Australian and Brazilian production and is expected to outweigh the forecast drop from the United States, as herd destocking slows from historic highs. Similarly, global dairy and sheep meat prices are forecast to decrease due to rising global supply from the United States, European Union, and Australia.
Supply and demand
Global demand for beef, veal, and sheep meat is projected to rise in 2023–24, driven by emerging and developing economies in Southeast Asia and China. However, this doesn’t necessarily sure up the outlook for the Australian red meat industry. China’s strong economic recovery will support short-term demand for Australian beef exports, but the Sino-Brazilian trade relationship and higher Australian beef export costs may lead to increased Chinese beef imports from Brazil in the long term. Additionally, demand for some Australian meat and livestock products may be affected by falling disposable incomes and a subdued economic outlook in developed economy export markets like the United States and Europe.
Industry opportunities and challenges
The livestock industry is also confronted with significant biosecurity challenges, including the risk of diseases like foot-and-mouth disease and lumpy skin disease. Preventing the introduction of these diseases into Australia is critical to ensuring continued international market access. On a positive front, the recently enacted Australia-UK Free Trade Agreement (A-UKFTA) offers promising prospects for Australian livestock exporters, granting immediate access to duty-free transitional quotas for beef and sheep meat, and eventually eliminating tariffs on all agricultural goods within a decade. As negotiations continue for the Australia-EU Free Trade Agreement (A-EUFTA), new export opportunities may emerge, contingent on the outcomes regarding market access and Geographical Indications (GIs) protection.
Genotyping and the year to come
The 2023-2024 Livestock Outlook Report provides valuable insights into the Australian livestock sector and the overall state of the industry, presenting a mixed outlook with both opportunities and challenges. In the challenging landscape of the livestock industry, particularly Australian red meat, farmers must prioritise efficiency and productivity to withstand the economic impact of declining prices.
XytoVet’s genetic testing offering emerges as a vital solution, empowering livestock producers to optimise operations and boost productivity. With access to XytoVet’s cutting-edge research and technologies, farmers can make well-informed decisions, enhance breeding practices, and identify livestock with desirable traits, resulting in increased yields and improved resilience. Explore XytoVet’s genetic testing options for sheep and cattle to unlock the full potential of your livestock and embrace a more resilient future.
Enquire today to find out how we can help you maximise your livestock’s profitability, productivity and overall well-being.
