Key points:
- April 2023 will be the shortest April working month since 2017, with cattle slaughter numbers expected to fall by 12%.
- The average month-on-month fall in beef exports over the past six years between March and April has been 11%, suggesting a similar fall may occur this year due to reduced production.
Several public holidays and less working days throughout April mean this month will have the lowest number of working days (17) since 2017, assuming processors are working a typical five-day working week with no Saturday kills.
Due to the NLRS not reporting national kill numbers in 2017 (the last comparable year with 17 working days), analysis has been conducted to compare eastern states kill numbers instead.
Cattle
In April 2017, eastern states kill numbers totalled 430,549 head and slaughter for 2017 reached 7.16m head. This was 7%, or 496,000 head, above the 2023 slaughter forecasts of 6.66m head, suggesting that April 2023’s monthly slaughter will most likely remain below the April totals seen in 2017.
In 2022, the weekly average kill rate for the four weeks of April was 83,492 head – a decline of 5% on the preceding four weeks in March. Kill numbers for the first four months of 2022 were significantly impacted by transport access, COVID-19 processing capacity issues and flooding.
However, when looking at April 2017, kill numbers declined by 15% or 20,000 head, compared to the previous four weeks.
During May, average weekly kills rose by 21% or 23,000 head, indicating a significant throughput lift following April’s shortened working period and topping the unimpacted rates prior to the beginning of April.
Historical data suggests weekly kill numbers in April 2023 could average around 96,000 head. This is assuming a 12% decline on the past four weeks’ average. This would total 384,000 head, which is a rise of 15% on the 333,000 processed in April 2022.
Following the end of April and shortened working weeks, the eastern states slaughter rates may potentially lift and rise above the current weekly average for 2023 of 96,000 head, as was the case in 2017.
Flow-on effects of lower cattle kill rates
A direct impact of lower kill rates in April, and therefore a decline in production, is lower beef exports. Without accounting for adjustments in demand, the month-on-month percentage fall in beef exports over the past six years (including April 2017) has averaged 11%. Of these six declines, April 2017 incurred the largest fall in export volumes, dropping by 26% compared to March.
Thus, based on average performance, a similar fall of 11% in beef exports for April 2023 may occur. This is purely based on historical performance and is not including the current market dynamics or international demand.
According to carcase weights are forecast to average 315kg/head. Assuming weights average 315kg through April, this would be a 20kg/head, or 7% rise, on Q1 2017 performance. It is expected the higher carcase weights may offset a fall in slaughter numbers through April, ensuring production remains buoyant. Production remains buoyant.
Sheep
The current sheep and lamb processing environment is unique, with large volumes of cheaper mutton available in the market at present. It has been observed that processors are substituting lamb with mutton due to the price gap. This makes it challenging to gauge future performance of slaughter for April as a result.
