Cattle prices pressured amid tighter supply

Key points:

  • Softening cattle prices across the eastern states
  • Light showers helped mitigate higher yardings this week
  • Domestic supply availability for finished cattle remains low

On Tuesday, the Eastern Young Cattle Indicator (EYCI) dipped below 750¢/kg carcase weight, back 7¢ on the week prior. However, at 745¢/kg, the indicator remains resolute despite the recent uptick in yardings, an appreciating dollar and unsettled global beef markets. Since hitting a peak of 772¢/kg on 17 June, the EYCI has declined 27¢, however, it still sits 227¢ above 2019 levels.

All eastern states saleyard price indicators have fallen this week. Medium steers saw the largest declines, with the Medium Cow indicator back 6¢ to 271¢/kg live weight. The Feeder Steer and Heavy Steer indicators were back 6¢ and 18¢, respectively, to 391¢/kg and 354¢/kg live weight.

After a relatively dry June, light rain across parts of eastern Australia over the last seven days will provide producers with confidence, while a positive long-term forecast for much of the east coast should help soften total yardings.

Saleyard throughput

Total yardings across eastern states for the first five weeks of winter were down 10% year-on-year. Saleyard throughput declined considerably in NSW, back 45% and offsetting a 19% lift in yardings in Queensland. Yardings in Victoria also increased 17%, however, the impact of Victoria’s recent border closure and return to lockdown could affect saleyard throughput in the south, with permits for agricultural workers required to cross state lines.

Focusing on EYCI eligible cattle yarded since June, numbers fell 24% year-on-year. National Livestock Reporting Service (NLRS) saleyard data demonstrates restocker buyers eclipsed feeders to account for the majority of sales. Lot feeder buyers purchased 41% of all EYCI eligible cattle, the same amount as in 2019, while restocker sales increased slightly from 44% to 46%.

Market reports suggest some lot feeders are experiencing difficulty in sourcing animals of appropriate specifications, with producers now having the option of holding onto stock.

Eastern states slaughter

The eastern states slaughter report continues to trend below year-ago levels and highlights the challenges faced by processors in securing slaughter ready cattle. Total cattle slaughter was back 4% on the week prior to 122,000 head for the week ending 10 July, 19% lower than the same week last year. In Queensland, numbers declined 6% to 60,900 head, down 24% year-on-year. In New South Wales, processor throughput eased 3% to 29,700 head, back 16% year-on-year. Victoria remained stable week-on-week at 23,200 head, but 12% lower year-on-year.

© Meat & Livestock Australia Limited, 2020

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