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A combination of soft prices discouraging sellers, and a typical seasonal pattern of lower supply reduced the number of cattle on offer this week, leading to prices in the market stabilising somewhat. A spark of optimism emerged though a slightly higher restocker price this week; indicating some bargain hunting might have been happening by those brave (or savvy) enough to try and catch falling knives

East Coast slaughter for the week ending 02nd December, 2022 fell 4% week on week to 98,332 head. While the dip is not in line with the typical 5 year trend of higher volumes toward the end of the year, the pattern of a slowdown towards Christmas does match what we saw happening last year, suggesting that the early taking of accumulate leave might be being encouraged.

The Eastern states Young Cattle Indicator (EYCI) slid back just a smidgen this week; only dipping 6¢(<1%) week on week, to close at 870¢/kg cwt. Overall, the return to stability can be traced back to a large week on week 30% collapse in supply, to with 5,000 less cattle contributing to the index this week.

The usual Queensland and NSW suspects made the core contributions to the EYCI index again, with Roma t 17%, Dalby at 16% and wagga at 14%. Roma steers traded at 919¢/kg cwt, and Dalby traded at a similar level at 913¢/kg cwt. Wagga Steers came in on the lower end, at 869¢/kg. Across the way, steers in Armidale moved at an average 969¢/kg cwt.

The Western Young Cattle Indicator (WYCI) lifte 23¢(3%) this week to close at 892¢/kg cwt; buoyed by an increasing vealer percentage; which reach 97% this week. Steers represented a small minority of cattle traded and prices fell 62¢(8%) week on week to 672¢/kg cwt.

Initial yardings data for the this week indicated that overall cattle supply fell 19% to 34,801 head; which is 20,000 head, or 36% less than the recent peak seen at the end of November. Over the past couple weeks, lower prices and the typical end of year slowdown in marketing interest has rapidly stemmed the level of supply going into the marketplace, leading to an overall stabilisation of prices as buyers still active have become less spoilt for choice.

The majority of the national indicators dropped this week; but not by as drastic amounts as we have seen in recent weeks; with the market showing signs of becoming more settled ad the supply/demand balance evens out. The wooden spoon this week went to processor steers, which lost 19¢(4%) to settle at 445¢/kg lwt. As usual though, take this figure with a pinch of salt, as only 58 head transacted, and with the majority trading in Naracoorte, where reports indicated not all processor buyers were active this week. In contrast, a spark of hope shone through with the restocker steer index crawling up 14¢(3%) to 562¢/kg lwt and positive action was present in the medium steer space, with the index lifting 12¢(3%) to 404¢/kg lwt.

The 90CL price dropped sharply in US dollar terms last week, falling 10¢(4%) to 230.0¢/lb and similarly, in Aussie dollars, the indicator lost 38¢(5%), closing the week at  751¢/kg swt. Steiner notes that imported beef supply in the US has been strong in recent times, with NZ slaughter rates trending higher, strong Brazilian shipments and expectations of more Aussie beef flowing through weighing on both buyer sentiment, and prices. US domestic prices for beef end cuts have also dopped on a steep trajectory over November; and a shift of retailers towards holiday features pushed lean beef prices south.

The week ahead….

The market seems to have stabilised, for now, as producers stepped back from the marketplace, but if we take guidance from last year’s supply situation, we can see that yardings jumped suddenly in the final weeks of the year as producers pushed to offload stock. This foreshadows that nothing is certain, and some risk might still be out there.

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Data sources: MLA, Steiner, Mecardo

Photo Credit: Bri Smith

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