The ongoing wildfires in Australia represent the latest in nearly a decade of environmental challenges the country has faced. That has prompted questions about the impact of the fires on Australian cattle and beef production as well as trade. This article was compiled from several Australian reports and other media and data sources.
Wildfires have burned more than 15 million acres, an area the size of West Virginia, and are not yet under control as of Jan. 10. About 9 percent of the Australian cattle herd is in areas significantly impacted by the fires, with another 11 percent in regions partially impacted by the fires.
The majority of the fire impact is in New South Wales in the southeast coastal region of the country, with more than 12 million acres burned. New South Wales includes about 18 percent of the Australian cattle herd. One recent report indicates that more than 6,000 head of livestock have been lost thus far in New South Wales.
The other state heavily impacted is Victoria, near New South Wales in far southeast Australia, with about 3 million acres burned. Victoria has about 15 percent of the total Australian cattle inventory, including about two-thirds of the 1.4 million dairy cows in Australia. Victoria and New South Wales, which include the major population centers of Sydney and Melbourne along with the national capital of Canberra, include most of the Australian dairy industry. As much as one-third of total dairy production is impacted by the fires.
The wildfires are the result of several years of widespread and prolonged drought in Australia. Drought-forced cattle liquidation is reducing total cattle numbers to the least in 30 years, about 24 million head in 2020. After peaking in 2014 at 29.3 million head, numbers decreased to 25 million head in 2017. They recovered slightly in 2018 before decreasing again in 2019 as drought resumed.
Additional cattle losses occurred in Queensland in northeast Australia. Massive flooding killed more than 300,000 head in early 2019. Queensland accounts for about 47 percent of total Australian cattle inventories.
Australian beef production and exports in 2019 were more than previously projected. Drought forced additional herd liquidation, with female slaughter reaching record proportions of total cattle slaughter. Beef production is forecast to decrease by almost 15 percent year-over-year in 2020, to the smallest level since 2010. Australian exports are forecast to decline by more than 19 percent from 2019 levels. Australia is expected to drop to fourth place among global beef-exporting countries behind Brazil, India and – for the first time – the United States in third.
Australia typically exports about 70 percent of total beef production; it’s seen major changes in export destinations recently. Traditionally beef exports went to Japan, the United States and South Korea. They were surpassed in 2019 by China, which accounted for 24.4 percent of total Australian beef exports. Japan accounted for 23.3 percent of exports; the United States for 20.5 percent and South Korea for 13.2 percent of 2019 Australian beef exports. U.S. imports of Australian beef increased 4 percent for the January-November 2019 period. That’s the second-largest import source behind Canada, accounting for 23.2 percent of year-to-date beef imports.
It’s mid-summer now in Australia. The drought continues unabated with severe rainfall deficits and greater-than-average temperatures. Additional herd liquidation is likely if conditions don’t improve.
In any event Australian cattle and beef production will be reduced for the foreseeable future. Rebuilding, whenever it can begin, will take several years.