StoneX Media
The last time El Niño met a large Australian cattle herd, in 2015, slaughter climbed to 37-year highs and beef production hit a record. El Niño puts the Australian cattle herd at risk because below average rainfall cuts grass on farm, pushing producers to sell more cattle, including the breeding females that drive future supply. The herd now sits at a similar stage of its cycle after four to five years of growth, with El Niño conditions forecast to take hold through 2027. That combination puts Australian slaughter, beef output and export capacity for the years beyond firmly in focus.
Ripley Atkinson, StoneX Australia Meats & Livestock Manager in Sydney, authors the firm's Australian Cattle and Beef Market Report and contributes weekly commentary on the Australian beef and lamb sectors. He tracks live cattle and beef supply, demand and price fundamentals, along with the export demand and trade flows that carry Australian beef into overseas markets.
Australia's cattle herd sits at a similar stage of its cycle to 2015, after four to five years of growth that have left it large. The 2015 cycle followed a rebuild that began in 2011, and when El Niño came into focus that year, Australian cattle slaughter climbed to 37-year highs and beef production set a record. Looking back at that period, Atkinson says "we saw the herd cycle at a very similar stage to where it is now." Notably, a large herd gives producers more cattle to sell once seasons dry out, which is the mechanism behind the 2015 surge in turnoff. Turning to 2027, Atkinson points to "the potential for the same dynamics to occur" as El Niño conditions establish themselves across the beef supply chain. For feedlots, processors and exporters, the 2015 precedent offers a reference point for how quickly Australian slaughter and beef output can climb once grass runs short.
"When you have below average rainfall, resulting in below average grass availability, farmers sell more cattle." That chain, Atkinson explains, is how El Niño reaches the Australian cattle market. El Niño is traditionally associated with warmer than average temperatures and below average rainfall in Australia, a pattern linked to cool sea surface temperatures pooling off the east coast. Producers without enough feed on farm have little choice but to sell stock, lifting the number of Australian cattle sent to slaughter. The same weather pattern traditionally brings favorable rainfall to the Americas, where U.S. ranchers and Brazilian beef producers would be expected to retain more cattle than normal. As a result, Australian beef supply can rise just as the other two major beef exporters hold animals back, a split that shapes competition across global beef markets.
Female cattle sales are the link between a dry 2027 and tighter Australian beef supply in 2028 and 2029. When grass runs short, producers sell more stock, and that turnoff includes more of the breeding females that underpin the Australian beef herd. The effect on the Australian cattle herd is delayed, with a liquidation in 2027 leaving fewer cattle available for processing in the following two years. For Australian beef exporters, fewer cattle translate into lower export volumes and weaker competitiveness in global markets. Rainfall timing remains the key uncertainty for Australian producers, since El Niño reduces rain without stopping it altogether. According to Atkinson, "when you sell more females in time, that means the availability of future supply will shrink."
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Ripley Atkinson, StoneX Australia Meats & Livestock Manager
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Australia's cattle herd sits at a similar point in its cycle to 2015, the last time El Niño drove slaughter to 37-year highs and beef production to a record. Below average rainfall and heavier female cattle sales now put Australian beef supply and export capacity in 2028 and 2029 in focus.
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