The release of Australian Bureau of Statistics quarterly slaughter data shows that the female slaughter ratio (FSR), which is the key measure of the status of the herd rebuild or liquidation, is showing we have formally entered a rebuild phase.
The FSR eased from 48.2% during the final quarter of 2020 to hit 45.5% during the first quarter of 2021. This places the FSR below the threshold of 47% that signifies a rebuild is underway. This is the first time the FSR has been under 47% since the first quarter of 2018 and the lowest quarterly measure since the end of 2017.
The seasonal pattern highlights that an FSR at 45.5% is at the bottom of the normal range that could be expected for this quarter in the season, according to the shaded 70% range. Assuming we follow the pattern set by the lower boundary of the 70% range for the rest of the season we should see an annual FSR close to 46%.
However, as outlined in our earlier piece on the FSR, the FSR model points to the prospect of the FSR heading towards to the low 40% region into the next few months so we are likely to see an annual FSR come in lower than 46% by the time we get to the end of 2021.