IT has been another strong 12 months for the beef industry and the future is looking just as bright.
On the back of increased domestic and international demand, the market has continued to be solid despite extra volumes entering the market as a result of the drought in the Eastern States.
Recent figures released by Meat and Livestock Australia (MLA) in its Beef Fact Sheets showed in the 2018-19 financial year Australia produced approximately 2.35 million tonnes carcase weight (cwt) of beef and veal and the gross value of Australian cattle and calf production (including live cattle exports) in the 12-month period was estimated at A$10.9 billion.
In terms of Australia's domestic market MLA reports Australian's consumed about 25 kilograms of beef per person in 2018-19 and domestic expenditure on beef was approximately A$8.76b.
When it came to beef exports Australia exported 72 per cent of its beef production to more than 70 countries and this generated $9.5b, while Australian live cattle exports were valued at A$1.6b in 2018-19 with 1.2 million head exported.
The story looks just as positive for this financial year as Australian beef exports have so far surged on the back of strong international demand and higher cattle turnoff than previous years, no doubt a result of the drought in the Eastern States.
Also with the Australian dollar at some of the lowest levels in years, this has made Australian beef exports more affordable within an increasingly competitive international market.
MLA recently released its October update for its 2019 industry projections for the Australian cattle industry and it reported for the calendar year to August 2019 that beef export values had reached A$6.8b, up 22pc on the same period in 2018.
The update also noted with the forecast increase in production, beef exports have also been revised upwards and are now expected to hit 1.19 million tonnes shipped weight (swt) in 2019, the third highest on record (only surpassed by the other severe drought years of 2014 and 2015).
According to MLA, China has become a key pillar in the world meat trade and as a result is having an increasing impact on the global market and subsequent price movements in the Australian domestic market.
According to the update, the strong finished cattle prices seen in 2019 have been supported by surging demand in China which has been underpinned by the ongoing African Swine Fever epidemic and a favourable Australian dollar.
It also said the ongoing United States-China trade war has created uncertainty for the global economy and future demand for red meat, but broad demand factors in many key export markets are still holding, and with the forecast for Australian cattle supplies to tighten over the next few years, continued support for finished cattle prices is expected.
Australian beef exports to China for the year to September were at 200,000t swt, up 73pc on 2018 and China even surpassed Japan as Australia's top destination for beef for July, August and September.
Much of this growth according to MLA has come from a 91pc increase in the volume of manufacturing beef, closely followed by blade which has improved by 81pc.
It said undoubtedly, these cheaper cuts of frozen beef make for an affordable pork substitute.
Another growth market so far this year has been the US.
MLA said Australia's volume of beef exports to the US was at 187,000t swt for the year to September, which was up 4pc on 2018, while the export value was up 19pc for the year to August.
It said this growth in the US was consistent across frozen and chilled product categories, with particular improvement coming from flank (up 15pc on 2018) and shank (up 33pc) cuts.
Saudi Arabia and Vietnam are other beef export markets which were up in terms of volumes shipped.
MLA reported shipments to Saudi Arabia were up by 41pc (to 9500t swt for the year to September), while Vietnam increased by 29pc (also to 9500t swt for the year to September).
When it comes to prices these have tracked a similar path to last year but are starting to strengthen.
In the projections update MLA reported prices in WA were performing the best of all States, with Western Young Cattle Indicator (WYCI) averaging 546c/kg cwt in October.
In the MLA weekly indicator report for the week ending November 15, the WYCI was at 550c/kg, slightly down on last year's figure of 564c/kg, however in comparison to the Eastern Young Cattle Indicator it was up 33c/kg.
When it comes to processing types, producers have also been seeing good returns for these.
Heavy yearling indicator (more than 400kg) was at 258c/kg to be exactly the same as 12 months ago, while the heavy cow indicator (more than 520c/kg) was 214c/kg, up from 186c/kg on the same week in 2018.
But it is not only in saleyards where producers are seeing better returns than last year - over the hook prices are also up.
In the week ending November 15, the grassfed yearling and grainfed indicators were at 560c/kg CWT, up from 520c/kg and 548c/kg in 2018, while the MSA yearling indicator was at 580c/kg and up from 15c/kg on the same time last year.
The first two WALSA Boyanup weaner sales of the season have seen some positives on the back of strong live export and lotfeeder competition and grazier interest on lighter lines at both sales.
At the first sale on November 13, prices were strong and up on current market values according to the agents.
Steers sold from 278 to 368c/kg,while heifers made from 218-326c/kg.
Overall the yarding of 1024 weaned calves averaged $985 which saw many vendors receive returns of more than $1000 a head on the heavier lines.
In comparison to the first weaner sale held last year at Boyanup, steers sold from 260-346c/kg and heifers made 200-312c/kg.
The second sale last week saw values up on the first sale, with the 971 weaners yarded reported to have met similar buying support.
Weaner steers sold from 300-352c/kg to be up $10c/kg on the first sale and heifers sold up 13c/kg at 240-310c/kg.
Elders WA livestock sales manager Tom Marron said the new season calf selling season had recently commenced in the agricultural regions with very positive results, particularly at special weaner sales at Boyanup and Mt Barker.
"As usual these calves are mainly purchased by lotfeeders but live export buying has been evident as well, adding another factor to the market," Mr Marron said.
"With the limited spring growth, cattle are being sold a bit earlier.
"The lighter weights saw local steer calves making up to and more than the 350c/kg mark at recent sales for these lighter types and all indications are that this trend will continue into the new year.
"Processors have been very active for all slaughter types, cows, bulls, heifers and grainfed yearlings.
"This has maintained steady prices due to normal supply and demand, increased numbers in the Eastern States due to drought and live export markets expanding to include these types of cattle.
"This year live export values have taken another step up with increased numbers and types of cattle going to China, Vietnam, Indonesia, Russia and Israel to name a few.
"All things being equal, this should be maintained or even increased next year if we get a normal season.
"The pastoral areas have generally had a tough year all round with limited enquiry for the lighter feeder types of steers and particuarly heifers.
"When it rains in the east there will be opportunities for graziers to restock and maybe take some of these heifers from the pastoral areas."
Landmark State livestock manager Leon Giglia said it was suggested the past 12 months would see the start of the next cattle price cycle.
"I firmly believe this has been realised and coincides with the decline in the national and State cattle populations," Mr Giglia said.
"This year's values have seen fair returns for the producer and we stated this time last year we wouldn't see any volatility in the market.
"I think the days of volatile movement in our livestock commodity prices have ceased for this period to come.
"We will see some fluctuations in the market from events such as monetary matters, but barring any unforeseen consequences, all things being equal, our markets should only fluctuate slightly and not see any significant rises or falls.
"I think the prices truly reflected the level of production and the demand for the product.
"Even if our cattle numbers weren't as depleted, I think the market wouldn't be too far away from where it is now because of the significant world demand for red meat."
Mr Giglia said while he forecasted a strong consistent cattle market in the short to medium-term, the industry needed to be on the front foot to face changes to consumer demands.
"Consumer tastes and requirements are altering," he said.
"Producers need to be mindful of what the requirements of the consumer are and processors should be looking further ahead and be in consultation with producers of these future requirements.
"As an example, you can buy ready-to-eat beef meals from the supermarket now, does that mean supplying different carcase weights, more grainfed products, does the carcase need to be smaller for smaller cuts?
"Looking into the future, I think there will be change driven by the consumer and producers and the industry need to be across these changes."