Glogal AgriTrends analyst Simon Quilty spoke to a crowd of producers in Roma last Friday evening about his thoughts on the current herd rebuild across both the state and the country, saying that while cattle numbers may never reach what they were pre-drought, this year's record prices could be trumped in years to come.
Mr Quilty said that the next peak in cattle production would be lower than the last, due to various decisions made by graziers during the dry, as well as a decrease in grazing land around Queensland over the last few years.
"The rate of cattle rebuild, is less," he said.
"We're seeing that the highs are getting lower and the lows, even lower again.
"In the period of 2020 to 2021, four million hectares of grazing land in this state disappeared.
"It was destocked, not to be restocked again, out of the hands of the grazing industry.
"My point to you is that grazing land is becoming less available, it's becoming more important and the value of your land is going higher, simply because of competition."
In a summary of the post-drought rebuild in Queensland, Mr Quilty said that the cattle herd grew at a rate of just 2.1 per cent between June 2020 and June 2021, while the sheep flock grew by 5.3 per cent.
He told the crowd that the impact of exclusion fencing on the herd rebuild was not to be underestimated, as it was one of the reasons behind many graziers deciding to destock their cattle herds and transition into sheep and goat operations.
"You've got a sheep flock rebuild going on the Eastern seaboard, moving from the west to the east and you've got exclusion fencing playing a critical role in New South Wales and Queensland in particular," he said.
"Parts of Queensland, in the west in particular, were really never suited for cattle, and drought came and basically they said we're not going to do that again.
"Instead, those areas have now gone into goats and sheep, in particular composite breeds, or shedding sheep, because no labour is required, and they're much easier to handle during drought.
"For the first time we are making decisions in the good times about drought, and I think that's a great thing, but there are real issues in terms of the land use and the competition, and without that exclusion fencing, this would not have occurred.
"I know of 500,000 head in one particular district in the west that have just disappeared completely, with goats and sheep replacing them, and that same story is all over in parts of New South Wales and other parts of the country."
In closing, the crowd received some good news, as Mr Quilty shared his five year forecast for the cattle market.
He said that this year's record prices were only a taste of what was to come and that producers could expect the EYCI to hit 1400c/kg in four of five years time, but not before a 32 per cent fall between 2023 and 2025.
Mr Quilty predicted that the next peak in beef production should be expected around September 2024, coinciding with the lowest cattle prices over the five year period, before a resurgence beyond anything we had experienced this year.
"Come 2026, if I'm right, production and cattle numbers will be so low, that if you thought the restockers went hard for the last two years, I can tell you now, you've seen nothing yet," he said.
"There will be record prices you've never seen before, because global markets will be stronger, and there'll be less cattle available in Australia.
"In terms of the beef herd, my expectation is that the high will be probably mid to late next year, and then we'll start to go back and the herd will fall below 20 million as we get into 2024 and 2025.
"For you beef producers, that's actually good news, because the demand for your animals grows as the herd gets smaller.
"As I said you've seen nothing yet."
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