The Eastern Young Cattle Indicator (EYCI) remained stable this week at 700¢/kg cwt.
Cattle Supply backed off slightly this week, with retreating around 5K (10%) from last week’s total to 44,779 head across the east coast. Most of the change emanated from QLD, where yardings dropped 25% week on week. In contrast, supply climbed 7% in NSW. Overall, the dip in supply provided some support to the market as the EYCI stabilised and the restocker steer index gained 6¢ (2%) to reach 422¢/kg lwt. However, the processor cow, feeder, and heavy steer index all fell 1-3% during the week.
The usual suspects of Roma, Dalby, Dubbo, and Wagga added up to 54% of the total index volume of 14,519 head, representing a 5% fall in total volume compared to last week. Keep in mind that supply at this level is still in the range of what could be considered quite high.
In Roma an increased representation of Western QLD and highlands buyers added support to steer prices. In Dalby, supply was down, but buyer attendance and interest were solid, with medium to heavy steer prices benefiting. Dubbo buyers were measured in their bidding, picking up stock on the cheaper side as a result. Wagga reported an increase in yardings, with some producers reportedly experiencing feed shortages. Competition among buyers was gauged as weaker, particularly from feedlot buyers.
US frozen cow 90CL price jumped again last week, gaining 30¢ (4%) in AUD terms to close at 796¢/kg swt. This can be attributed to a fall in the value of the Aussie dollar against the greenback by over US1¢ (~2%) and also a US5¢ (~2%) jump in the 90 CL price in US dollar terms to reach 244¢/lb.
Steiner reports that the lift in imported product prices in the US has been traced back to increased competition for meat emanating out of Asia, leading to US buyers bidding strongly to secure product.
The increased supply of Australian beef (as slaughter tracks above year-ago trends) appears to be counteracted by the strengthening of US buyer sentiment (and increased demand).
While boneless beef cold storage in the US remains high in a historical context, the latest January figures suggest that a drawdown is slowly taking place in response to rising US and imported product prices. Steiner makes an excellent observation that the composition of what is in storage is unknown- (It definitely isn’t all 90CL for example) therefore the potential for drawdown to help keep a lid on US beef prices relevant to Australia like 90CL may be limited.
The Brazilian Mad Cow (BSE) saga looks to be coming to a conclusion, with the Brazilian Ministry of Agriculture announcing that the World Organisation of Animal Health (WHOA) reference lab has confirmed that the isolated case found was indeed, Atypical type H. The ministry has announced that it will be meeting with the Chinese government, with the aim to lift the temporary export ban as soon as practical.
Furthermore, Brazil announced that it has finally gained market access into Mexico after more than 12 years of negotiations. Mexico is a significant importer of predominantly cheaper cuts of beef from the US, and an exporter of higher value, lean beef into the US. Brazilian imports have the potential to supply domestic Mexican consumption, leaving more headroom for increased Mexican exports, particularly into the US. Earlier this year, Brazil also achieved greater access to the Indonesian marketplace, with a further 11 processing plants gaining export accreditation.
Brazil busy as BSE risk eases
The Eastern Young Cattle Indicator (EYCI) remained stable this week at 700¢/kg cwt.
Cattle Supply backed off slightly this week, with retreating around 5K (10%) from last week’s total to 44,779 head across the east coast. Most of the change emanated from QLD, where yardings dropped 25% week on week. In contrast, supply climbed 7% in NSW. Overall, the dip in supply provided some support to the market as the EYCI stabilised and the restocker steer index gained 6¢ (2%) to reach 422¢/kg lwt. However, the processor cow, feeder, and heavy steer index all fell 1-3% during the week.
The usual suspects of Roma, Dalby, Dubbo, and Wagga added up to 54% of the total index volume of 14,519 head, representing a 5% fall in total volume compared to last week. Keep in mind that supply at this level is still in the range of what could be considered quite high.
In Roma an increased representation of Western QLD and highlands buyers added support to steer prices. In Dalby, supply was down, but buyer attendance and interest were solid, with medium to heavy steer prices benefiting. Dubbo buyers were measured in their bidding, picking up stock on the cheaper side as a result. Wagga reported an increase in yardings, with some producers reportedly experiencing feed shortages. Competition among buyers was gauged as weaker, particularly from feedlot buyers.
US frozen cow 90CL price jumped again last week, gaining 30¢ (4%) in AUD terms to close at 796¢/kg swt. This can be attributed to a fall in the value of the Aussie dollar against the greenback by over US1¢ (~2%) and also a US5¢ (~2%) jump in the 90 CL price in US dollar terms to reach 244¢/lb.
Steiner reports that the lift in imported product prices in the US has been traced back to increased competition for meat emanating out of Asia, leading to US buyers bidding strongly to secure product.
The increased supply of Australian beef (as slaughter tracks above year-ago trends) appears to be counteracted by the strengthening of US buyer sentiment (and increased demand).
While boneless beef cold storage in the US remains high in a historical context, the latest January figures suggest that a drawdown is slowly taking place in response to rising US and imported product prices. Steiner makes an excellent observation that the composition of what is in storage is unknown- (It definitely isn’t all 90CL for example) therefore the potential for drawdown to help keep a lid on US beef prices relevant to Australia like 90CL may be limited.
The Brazilian Mad Cow (BSE) saga looks to be coming to a conclusion, with the Brazilian Ministry of Agriculture announcing that the World Organisation of Animal Health (WHOA) reference lab has confirmed that the isolated case found was indeed, Atypical type H. The ministry has announced that it will be meeting with the Chinese government, with the aim to lift the temporary export ban as soon as practical.
Furthermore, Brazil announced that it has finally gained market access into Mexico after more than 12 years of negotiations. Mexico is a significant importer of predominantly cheaper cuts of beef from the US, and an exporter of higher value, lean beef into the US. Brazilian imports have the potential to supply domestic Mexican consumption, leaving more headroom for increased Mexican exports, particularly into the US. Earlier this year, Brazil also achieved greater access to the Indonesian marketplace, with a further 11 processing plants gaining export accreditation.
The week ahead….
A forecast of heavy rainfall from northwest to southeast Queensland next week has the potential to cause supply to drop off as soft ground impacts logistics.
Further from home, despite the “Atypical” diagnosis of the Brazilian BSE case, the wheels of bureaucracy are still turning slowly in China, so the situation still requires monitoring.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: MLA, Steiner, Argus, Mecardo,
Categories
Have any questions or comments?
Restockers to set pace after Autumn break
Most recent industry outlooks point to a steady-as-she-goes cattle market for the medium term, with strong ongoing export demand and high slaughter levels counteracting the
Export buyers out of office
With the nation stopping yesterday to commemorate ANZAC Day, Thursday livestock sales did not take place. As a result, this week saw a decrease in
Cattle price volatility lower as supply and demand find balance
Cattle market volatility has waned recently. The wild swings of 2023 saw prices move up to 70% across the course of two months. Thus far
Weather whiplash creates erratic cattle market
Roads and paddocks have begun to dry out allowing the backlog of cattle from soaked areas of Queensland and New South Wales to hit the
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.