Australia's cattle herd will grow to its biggest since 2014, signalling confidence in the industry despite natural disasters affecting many parts of the country.
The herd is expected to reach 28.8 million head, an increase of 1.1 million or 4.5 per cent year on year, according to Meat and Livestock Australia's (MLA) industry projections.
The increase in cattle herd numbers is not expected to stop in 2023 but rather progress into 2024.
"When you look at the key metrics, the expectation is for that to continue, regardless of the seasonal outcomes," MLA senior market information analyst Ripley Atkinson said.
A tumultuous decade
It is a huge turnaround from June 2020 when producers were forced to destock due to drought, reducing the herd to 24.6 million head that year, the lowest level since the 1990s.
Since then, the country has experienced consecutive years of La Nina, which contributed to devastating floods across much of Australia.
At the same time, cattle also fetched record prices.
Colin Greenfield, owner of Billa Kalina cattle station between Coober Pedy and Roxby Downs in outback South Australia, said as a result more producers had retained cattle as breeders rather than sending them to slaughter, which had led to an increase in females.
"We've been up and down, we had extremely dry periods four years ago for a couple of years, so our numbers were cut right back," he said.
Mr Greenfield said last year cattle prices were "as good as we can ever remember" and his cattle numbers almost reached the station's maximum.
It has also been a tumultuous decade for grazier Ron Cook from Channel Downs, south-east of Julia Creek in north-west Queensland.
"In 2013 it just didn't rain, the wet season never turned up, it was a pretty tough year," he said.
"Things weren't looking good but slowly things turn around, but then in 2019 we got pretty well washed away, so we've been in a rebuilding stage ever since," he said.
Mr Cook said the rebuild in numbers could now signal a fall in cattle prices.
"If the national herd numbers keep creeping up, it means the cattle price might come back [down]," he said.
Why are cattle numbers on the rise?
Mr Atkinson said three key factors underpinned the increase in supply.
"Firstly, the record retention of animals on farm in 2022 and parts of 2021 is driving that increase," he said.
"Secondly, it's the genetic improvement which is affecting productivity of the national herd.
"And also, the medium-term confidence that is a product of ample availability of water and grass for producers."
The large herd size in Australia will not just impact the domestic market.
The drought in the US has resulted in reduced herd numbers to the extent that Mr Atkinson said 2023 would be the year when the US flipped from a net exporter to a net importer.
"That will mean Australia's market share in line with rising production can improve in key export markets, such as Japan and South Korea and also the US as well," he said.
Price and labour the limitations
Mr Atkinson said the increase in cattle numbers was expected to continue into 2024.
As a result cattle prices would return to longer term averages.
Mr Cook said it had taken a few years between droughts and floods to rebuild and he was concerned about what would happen to cattle prices.
But he said as the national herd numbers rose nationwide, optimism was on the horizon.
"This is the best start we have ever had here. The feed is unbelievable and the rain has fallen and nothing has run away," he said.
But there is a catch.
Most Australian cattle is destined to end up on our plates, but the processing sector is facing unprecedented labour issues that could impact how much meat actually makes it to supermarket shelves.
"So there's no improvement in cattle slaughter figures despite the fact that the herds are continuing to rise and that will cause issues for the industry right across the supply chain," Mr Atkinson said.
