Where are all the NT cattle going?

Low live export numbers prompt NT supply surge concerns


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Picture by Kelly Butterworth

Picture by Kelly Butterworth

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Comment: In this month's Rabobank column, senior protein analyst Angus Gidley-Baird looks at recent stock movements out of the NT and their potential impact on Queensland cattle prices.

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Live cattle export volumes have dropped dramatically in 2017. But are these low volumes indicating that the trade is shrinking or is it just a reflection of northern Australia’s reduced cattle supply?

Total live export figures for the first seven months of 2017 show that numbers have declined 34 per cent compared to the same period in 2016. Exports to Indonesia are down 29 per cent and Vietnam exports are down 19 per cent. One may presume that the ongoing dry conditions have just reduced cattle availability. However, looking at Australian slaughter numbers – which are down five per cent year on year for the first seven months of the year – live export numbers have seen a far greater decline than slaughter, suggesting cattle numbers are not the only reason.

But 2016 was a big year and the period between 2014 and 2016 saw highly-inflated numbers due to the dry conditions and stock liquidation. To get a more realistic picture, current year-to-date figures are compared with the five-year average from 2009 to 2014 and it shows that current volumes do not look too bad. Total live exports are up 4 per cent and exports to Indonesia are down 6 per cent on the five year average between 2009 and 2013. So maybe we are just returning to normal levels?

Angus Gidley-Baird, Senior Analyst, Rabobank

Angus Gidley-Baird, Senior Analyst, Rabobank

Looking into the numbers further, however, raises another question. While the live cattle exports out of the port of Darwin are in line with the 2009-2013 average, the source of those cattle has changed. Cattle that are sourced from the Northern Territory in the first seven months of 2017 are at their lowest levels in over 15 years, down 36 per cent on the average (2009-2013). They currently account for 58 per cent of the cattle compared with 91 per cent during the period 2009 to 2013. 

Where are the NT cattle going then? Looking at cattle movements out of the NT shows that for the financial year 2016/17 the number of cattle that have moved out of the Territory to other states is 28 per cent lower than the average for the period 2009/10 to2013/14. So if they are not going on boats and they are not moving interstate, they must be staying put. Granted some will be killed at the Livingston facility, but, with favourable seasons, feed availability is good and financial pressure to sell is lower so livestock numbers are expected to be growing.

So if they are not going on boats and they are not moving interstate, they must be staying put.

So live export numbers have declined but they are not unusual compared with more normal conditions. Producers in the NT appear to be holding on to cattle and at some stage they are expected to hit the market. The question is – will they sell before the wet season?

For Queensland producers, a build-up in NT cattle will in time relieve the supply side pressure particularly for the live export market, meaning softer cattle prices. 

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