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.
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.