RABOBANK
Last month’s Northern Territory Cattleman’s Association annual conference provided a great opportunity to catch up on what is going on in the NT. The theme of the conference itself was innovation and there were some great speakers, but what was particularly interesting to me is the current state of the NT cattle herd.
When you look at the numbers, you start to ask yourself the question … where are all the NT cattle?
2017 was a low year for live cattle exports generally, with feeder and slaughter cattle numbers down 24 per cent to 760,000 head. This was to be expected given the high volumes that were exported through 2014 to 2016, with dry conditions forcing liquidation of cattle and producers now starting a rebuilding phase. Cattle exported out of Darwin port also reflected this trend, down 17 per cent to 296,000 head. But it is when you start looking below this – to what the origin of the cattle are – that things become interesting.
Northern Territory cattle that leave via the Darwin port have trended pretty consistently between the 200,000 and 300,000 head mark for the past 12 years. Last year this number dropped to 177,500 head – the lowest in over 10 years – and down 64 per cent on the 10-year average of 277,000.
If NT cattle being live exported are down, maybe the cattle are going somewhere else? This does not appear to be the case. In 2017, the number of cattle that moved from the NT to other states also dropped by 25 per cent to 261,000. While this is not the lowest in 10 years – it is third lowest – it is below the 10-year average of 300,000 head. Most of these cattle went to Queensland.
So if cattle have not been leaving the NT by live export or interstate trade, where have they been going? This was the question put to a number of attendees at the NTCA annual conference.
There is the Livingstone abattoir that would account for some. At 500 head per day capacity, that might account for 125,000 head. But even if running at full capacity, the abattoir is not expected to be taking cattle out of the live trade.
The only other explanation is that cattle are staying on property. With a number of properties carrying out significant capital upgrades with additional fencing and watering points being installed, carrying capacity is being increased by 50 to100 per cent in some cases. Furthermore with reasonable seasons that have allowed for the retention of stock and better prices that have provided some respite from a cash flow pressures, producers have been in a position to hold stock.
This is great for the industry in the NT, however, the challenge may come in a year or two when these additional stock need to find a market. In 2006, cattle turned off NT properties dropped to a similar level to that in 2017 at about 400,000 head. By 2008, the number had almost doubled to 700,000 head and the largest number in the last 15 years. While many things affect cattle prices and history is not necessarily a good gauge for the future, it is fair to say that 2008 was not a year of high prices.
