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Producers in many areas are eagerly awaiting rain predicted for this coming weekend, as a dry autumn starts to bite into feed on hand. The winter chill has already started to make things tough for some, and they could be looking to cull older or non-performing stock to lighten the feed out load for coming months. We are now also seeing the Australian cow herd reach its maturity, being at its strongest levels in 15 years according to Meat and Livestock Australia, meaning turn off will be less weather dependent and more excess supply orientated.

We’ve seen this in the cow price in recent weeks as it predominantly responds to supply, with price rises then being countered by extra numbers coming in. At 423¢/kg, the national processor cow indicator is currently trading on-par with year ago levels. After last year’s substantial decline – the indicator lost 200¢/kg from the start of the year until the end, it currently is very close to where it started 2024. However over the year-to-date it has bounced around, sitting in an about 80¢/kg range from week to week.

The current price is exactly in-line with the longer 10-year average, and also the average price for the year-to-date of 425¢/kg. However it is lagging about 50¢/kg behind the five-year-average for this time of year, and about 60¢/kg below the average for the first five months of last year. As we can see from figure 2, there has been more volatility than the averages represent, but the peaks and dips have generally followed last year’s, albeit at a different price point. Until now. Last year the price declined through the winter, whereas this year it looks to be following a more ‘normal’ trend and increasing slightly.

Looking ahead, we will use the 10-year-average as a gauge, as it sits a lot closer to actual current price, however as we can see the trends for the 10-year and five-year average don’t differ all that much. Both have the cow price peaking for the year in mid-november, and we can see the 10-year line especially trends dearer from now until then. The 10-year average lifts 40¢/kg, or 9%, between now and the first week of spring, which would bring the cow price to 464¢/kg come September.

Turning to supply quickly, we know slaughter has been well up this year, with the weekly numbers averaging about 5% above the five-year figures. The latest ABS slaughter data, released earlier this month, has cow and heifer slaughter at 852,200 head for the March quarter, which is 30% higher than the same three months last year, and 8% above the five-year-average for the same period. In comparison, total slaughter was only 17% higher for the quarter year-on-year, but it was 10% above the five-year-average.

What does it mean?

MLA is reporting processors are dictating market conditions more than ever, with their buying outpacing both feeders and restockers. As the herd maturation has put the brakes on restocker activity, this will only be heightened as we move into winter, especially in the cow market. Strong global demand, especially from the US, should keep that end of the equation ticking along, and while the female slaughter is up, it is still below the 2019-20 figures for the March quarter, meaning supply hasn’t been extreme – yet. If seasonal conditions continue to tighten and more females hit the market, it could quell some of the usual winter uptick.

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Key Points

  • Current national processor cow indicator right inline with the 10-year-average.
  • Historical trend sees a 9% price rise through winter.
  • Demand remains strong, but additional supply could impact the historical trend of increasing prices.

Click on figure to expand

Click on figure to expand

Data sources: ABS, MLA, Mecardo

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