How full are Australia's cattle paddocks? ABS revises herd estimate

The Australian Bureau of Statistics, having changed its methodology, is now suggesting the herd is much bigger.

Its revised estimate of the herd for the 2023 financial year is 27.8 million head, a jump of 3.4m head on the 2022 figure.

That would make it the largest the herd has been in five years but at least a reasonable percentage of that can be accounted for in the fact the ABS is now counting smaller producers whose turnover has not reached $40,000, something it did not do before.

The other changes the ABS has implemented include abandoning beef producer surveys and the use of an ongoing red meat statistics working group with other government and industry people involved, in order to access more data sources.

The new ABS figure lines up far closer with Meat & Livestock Australia estimates, which had the herd at 28.6m for the same period.

There is now only a 4pc difference between these two key organisations but they still remain a fair distance from other forecasters, some of whom put the herd at more than a million head smaller.

It's this discrepancy that seems to be causing the most angst among cattle breeders and traders as it means there is a question of whether the herd is rebuilding or liquidating. Those two directions have significant implications for what the market is likely to do.

Farm business consultants say more than ever, producers have to account for the fact there is more than one measure of the herd and therefore varying expert opinions on what numbers will be coming down the pipeline.

Processing leaders, big pastoral company bosses and prominent producers have this year lashed out at the differences in herd estimates, and forecasts, saying not only is it making planning very hard but the wrong messages could be sent to overseas customers.

NSW Hereford breeder Marc Greening, Holbrook, said there was no other agriculture industry where stock-on-hand estimates differed by such a large percentage.

Consolidated Pastoral Company's Troy Setter told the ABC earlier this year: "We have world-leading traceability and animal identification systems - we owe it to everyone in the red meat industry, including our customers, to accurately know how many cattle we have in Australia."

Beef analyst Matt Dalgleish, Episode 3, said the ABS move to rework its methodology was a massive positive for the industry.

"There is a lot of data out there now that can be drawn on to improve estimates and it is appropriate that the ABS looks to modernise," he said.

"This latest revision is not going to put pressure on prices all of a sudden. We don't suddenly have a bigger herd materialising out of nowhere. These extra cattle were always part of the industry, they were just not being counted.

"There is no change to the estimated slaughter numbers for 2024."

Global AgriTrends analyst Simon Quilty said differences in herd outlooks had the potential to both confuse and send the wrong message to global markets.

The ABS 2023 number of 27.8m compares to his estimate of 26.5m.

Mr Quilty bases his assessment largely on slaughter numbers, which have been trending down since 2012.

2023 was the 15th lowest slaughter volume year in 52 years, he said.

With that comes a lower herd size.

Mr Quilty believes the herd will move into rebuild mode on a national scale this year.

NSW has already shifted into a rebuild in the last quarter, after months of liquidation, and Queensland had been in a holding pattern with the herd size moving sideways for almost a year, he said.

By comparison, MLA says the herd will sit in a maintenance phase.

MLA's Stephen Bignell said the forecasts were not as misaligned as some perceptions suggested, and the ABS revision went a long way to closing the gap.

He said MLA figures would change as it calibrated to the new ABS stats.

He made the point the approaches between the key organisations were nuanced, with MLA doing forecasts where the ABS did not play in that space.