AUSTRALIA'S cattle herd is rebuilding at a faster rate than it has ever grown in history, turnoff is increasing, carcase weights are getting heavier and the beef being produced is selling at higher prices.
It's an impressive picture and it puts into perspective the recent decline in the Eastern Young Cattle Indicator, which incidentally has come off an all-time peak and still sits well above the five-year average, both in nominal and real terms.
And it's not surprising, says Meat & Livestock Australia's managing director Jason Strong.
It's the culmination of what the industry has been collectively planning, and working on, for the past 20 to 30 years, he says.
We should be far more sophisticated than referring to gravity when we are talking about cattle prices: "What goes up must come down."
"There is so much strength behind the big macro drivers supporting our industry position at the moment," Mr Strong said during the opening address for the Australian Brahman Breeders' Association conference, held in Brisbane last week.
"We are recovering fast from what was arguably the largest decline ever in our herd numbers during 2018 and 2019.
"We are growing our herd faster and we are increasing our slaughter rates faster than at any other time."
2022 average carcase weights are at a record 320 kilograms per head, which represents a 37kg rise since 2019.
"Some of this is driven by increases in feedlotting, which is now running at around half our turnoff," Mr Strong said.
"But overall, we are benefitting from the investments we've made into productivity."
And while Australia's beef export volumes are down, value is up. Our beef is selling for more.
There are some big underlying reasons for all this.
"Our industry is in a materially different position today than it was 20 years ago," Mr Strong said.
"We have to stop being surprised by our success. This is why we've made investments.
"Twenty five years ago we didn't have a traceability system, a quality assurance system, an eating quality system or good market information and we had only one free trade agreement and that was with New Zealand."
We now have world-leading systems in all these spaces, real time market data and 16 FTAs.
"So we have preferential access into high quality markets with more discerning consumers willing to pay more money for a high quality, consistent product which we can provide credentials on that are a lot better than any other beef producer in the world," Mr Strong said.
"The current high prices and strong demand for our products is what we planned for."
Further, the key macro issues for beef on the challenging side were largely short-term and able to be fixed, Mr Strong said.
They include inflation pressures but "our product is increasing in price because it is higher quality, more consistent and there is more demand for it," he said.
Freight and shipping costs are still high but this is an incredibly volatile space and it shifts quickly.
"One of the biggest drags on our current pricing is actually the ability to process livestock," Mr Strong said.
"We just don't have enough people to keep our abattoirs at full capacity. That is going to have a much bigger impact on current prices than anything else but it is something we can fix - we will get past it."
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