Cattle

The cattle industry is the largest agricultural sector in Australia with annual production of $18.2 billion

While it is smaller than the mining industry, the Australian meat industry represents a meaningful and growing share of the country’s export sector.

Beef exports for 2015 were valued at $9.3 billion, 84% above the ten-year average and are expected to benefit as a consequence of recent free-trade agreements with China, Korea and Japan. The lower Australian dollar has also made exports more competitive.

Beef & veal exports vs other agricultural commodities1

beef exports

Within the domestic market, historically high beef prices of greater than 500 cents per kilogram carcase dressed weight (cwt/kg, based on the Eastern Young Cattle Indicator) have driven growing export demand and low domestic herd numbers. These factors are expected to continue to drive strong competition between re-stockers, feedlots and processors. Cattle property values however are yet to respond to the high cattle prices, indicating that there is potential for higher than average growth in properties values. ABARES projections indicate that high beef prices above 500 (cwt/kg) may continue over the next five years.

Queensland grazing property prices, cattle prices2

property and cattle prices

Australia’s national herd of cattle currently stands at 29.1m head, with 44% in Queensland (12.9m) head in Queensland where the Rural Funds Group holds three cattle properties and over 10,000 head of cattle.

Sources

1 Australian Bureau of Agricultural Resource Economics and Sciences (ABARES)
2 Herron Todd White, Australian Grazing Property Index dataset, 2016. Property price index calculated as $/ha sales of relevant properties, rebased to 100