Inside Business Dairy
How is the dairy sector doing 'Down under'?
Australian dairy farmers have had a tough year due to persistent drought. Last summer the weather conditions were much better, but many dairy farmers have already thrown in the towel. As a result, the dairy herd has shrunk and the slaughter is expected to fall to a historically low level.
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Australia's dairy herd has shrunk significantly due to dry weather conditions that have made life difficult for dairy farmers. Persistent drought caused difficult crop growth and low feed supplies and empty water basins. Due to shortages, dairy farmers were forced to cull cows. A low point was reached in the middle of last year and there were still approximately 25,62 million dairy cows. This was the lowest number in 25 years.
Last spring and summer (September to February) the weather conditions were wet and cool, which was positive for the harvests. As a result, feed supplies have been replenished and Australian dairy farmers are once again busy replenishing their herds. Meat & Livestock Australia expects the number of dairy cows to rise again to 25,92 in June this year, 5,3% more than in the same period last year. The old population, of approximately 28 million, should be reached again by 2023. Unless a new drought throws a spanner in the works.
Prices skyrocket
The scarcity of animals is also clearly reflected in the price index of the Eastern Young Cattle Indicator (EYCI). The index for young cattle from 200 kilos broke the limit of $9 (€5,87) per kilo of slaughter weight for the first time in April. Both male and female young cattle have never been so expensive in Australia.
Less slaughter and export
Meat & Livestock Australia (MLA) therefore expects cattle slaughters to be significantly lower this year and will probably even reach the lowest level in 35 years. The forecast has been further revised downwards to 6,78 million slaughters. Compared to 2020, this is a decrease of 10,7% and compared to 2019 it is even a decrease of 25,1%. An expected increase in average slaughter weight limits the decline in total beef production. Nevertheless, a decrease of 8,6% is still calculated.
The stagnation in beef production is also expected to lead to lower exports. Beef exports this year are expected to be 11,7% lower than last year. Live cattle exports are also likely to reach a new low, falling by around 25% to 750.000 head.