There has been very little movement in the cattle market as we move closer to spring, which may actually be a sign of some resilience as slaughter remains at its highest level since 2020. Most indicators have in fact seen a slight lift over the past month, as they historically do at this time of year, and although it hasn’t been enough to impact producer’s decision making, it might give them confidence that the bottom is either here, or at very least near. Of course, market sentiment is really resting on which way the weather swings once winter is behind us.
To cows first, and the national indicator held firm this week, closing at 385¢/kg, which was 33% below the five-year-average for the same week. We actually have to go back as far as 2014 – nearly a decade – to find a cow price lower at the same time of year. Roma contributed the biggest number of cows, followed by Wagga Wagga, Dalby and Wodonga. Noticeably, the Queensland yards averaged below the indicator price, while the two NSW/Vic yards were close to 20¢/kg higher. Failing to support the domestic market is the 90CL US lean beef export price which has continued to slide as supply outweighs demand both in America as they move past their BBQ season, and further afield.
Contributing to this supply is Australian slaughter, still operating at levels 33% above last year for 2023 so far. Putting this into a longer term perspective though, weekly slaughter has still been below the five-year-average for this month so far. And while weekly average slaughter for the year-to-date is above the past two years of herd rebuild, it is still lower than any other year back to at least 2011. Long term yardings are in the same position, however for the month of July they are lower than any month this year since January, and well below the average for the year-to-date.
The heavy steer price lost 10¢/kg this week, but is up 8¢/kg in the past month, remaining at one of the smallest discounts year-on-year across the categories (down about $1/kg). It sits at just shy of 284¢/kg liveweight, with NSW contributing the majority of cattle to the latest indicator, while still maintaining a 1.5¢/kg premium over the national price. Also rising 8¢/kg in that past month is the Eastern Young Cattle Indicator, which at 575¢/kg is at its strongest level since the beginning of June. The Feeder Steer Indicator is at 381¢/kg, but feedlot grids are trading higher at 340¢/kg with reports of in-spec cattle in tighter supply, and producers reluctant to sell ahead as they wait for more market indicators.
Next week
The market appears to be in a holding pattern as little waivers in the supply and demand scenario, and producers continue to wait and see re the predicted looming El Nino. The resilience this month could be promising that there is little downside left to come, however reports of high cold store levels in Asia and stronger than first thought production in the US this year could put a dampener on growing export levels, while young cattle supply is only likely to increase come spring.
The long-predicted slowdown in US beef production has seemingly come into play this year, and Australian beef is filling some of the production gaps. Total
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Cattle hold firm for July
To cows first, and the national indicator held firm this week, closing at 385¢/kg, which was 33% below the five-year-average for the same week. We actually have to go back as far as 2014 – nearly a decade – to find a cow price lower at the same time of year. Roma contributed the biggest number of cows, followed by Wagga Wagga, Dalby and Wodonga. Noticeably, the Queensland yards averaged below the indicator price, while the two NSW/Vic yards were close to 20¢/kg higher. Failing to support the domestic market is the 90CL US lean beef export price which has continued to slide as supply outweighs demand both in America as they move past their BBQ season, and further afield.
Contributing to this supply is Australian slaughter, still operating at levels 33% above last year for 2023 so far. Putting this into a longer term perspective though, weekly slaughter has still been below the five-year-average for this month so far. And while weekly average slaughter for the year-to-date is above the past two years of herd rebuild, it is still lower than any other year back to at least 2011. Long term yardings are in the same position, however for the month of July they are lower than any month this year since January, and well below the average for the year-to-date.
The heavy steer price lost 10¢/kg this week, but is up 8¢/kg in the past month, remaining at one of the smallest discounts year-on-year across the categories (down about $1/kg). It sits at just shy of 284¢/kg liveweight, with NSW contributing the majority of cattle to the latest indicator, while still maintaining a 1.5¢/kg premium over the national price. Also rising 8¢/kg in that past month is the Eastern Young Cattle Indicator, which at 575¢/kg is at its strongest level since the beginning of June. The Feeder Steer Indicator is at 381¢/kg, but feedlot grids are trading higher at 340¢/kg with reports of in-spec cattle in tighter supply, and producers reluctant to sell ahead as they wait for more market indicators.
Next week
The market appears to be in a holding pattern as little waivers in the supply and demand scenario, and producers continue to wait and see re the predicted looming El Nino. The resilience this month could be promising that there is little downside left to come, however reports of high cold store levels in Asia and stronger than first thought production in the US this year could put a dampener on growing export levels, while young cattle supply is only likely to increase come spring.
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Data sources: Mecardo; Meat and Livestock Australia; Argus Meat and Livestock; Steiner Consulting Group
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Export buyers out of office
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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
US herd build provides a boost
The long-predicted slowdown in US beef production has seemingly come into play this year, and Australian beef is filling some of the production gaps. Total
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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.
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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.