close up of cattle in paddock- photo by Bri smith

As numbers have returned to the saleyards, some of the “wet weather premium” that popped up in finished cattle in recent weeks has begun to evaporate. Despite a spike in supply of young cattle, prices are holding relatively well, but it remains to be seen whether healthy demand will persist or it’s a carryover from the unfulfilled interest in the prior week.

Despite the torrent of rain and the impact on roads, cattle are clearly still getting through to the processors, with east coast slaughter holding relatively steady last week at 92,326 head. Admittedly, numbers in QLD and NSW were down on the prior week by 3%, and 4% respectively, while VIC slaughter surged 17% to 11,951 head.

The Eastern states Young Cattle Indicator (EYCI) slipped back 22¢(2%) to settle at 1,019¢/kg cwt. Roma Store, Dalby & Wagga were the big influences on the index, at 30%, 15% and 9% respectively, With Dalby & Roma Clocking in steer prices of 1,019¢/kg, 1,013¢/kg, while Wagga achieved a more hefty 1,079¢/kg. All things considered though, the index held up remarkably well against a surge in supply of over 100% from the week prior, to 14,133 head- the second biggest yarding seen in the last 6 months. Numbers were down last week though due to bad weather, so pent-up demand has likely created temporary support.

The Western Young Cattle Indicator (WYCI) gave up 40¢(4%) this week to close at 948¢/kg cwt. Support was provided by a reduction in the vealer proportion of the index, and a small lift in average steer prices to 920¢/kg cwt, but it was a 86¢(9%) drop in average WA heifer prices that was the main cause of the fall.

Preliminary national yarding numbers this week indicated a 40% increase in offerings, to 42,000 head nationally. The recovery was mainly in NSW and QLD, however, VIC numbers dropped.

The national indicators revealed a fall in prices for most specifications, with finished heavy steers and medium steers both booking 7% falls to 449¢/kg and 448¢/kg. This suggests the impact of the floods on the availability of finished cattle in prior weeks caused a bit of a wet weather premium, that has retreated now that supply has begun to flow again.

The 90CL frozen cow price was static in US dollar terms last week, but advanced 1% to 869¢/kg swt on the back of the depreciating AUD. The outlook is a bit of a mixed bag. On one hand, US consumer demand is still looking extremely uncertain, but on the other, there is an expectation that the US cow cull will need to come to an end and conditions will improve, (surely the drought won’t drag on longer?) reducing US domestic supply, and increasing demand for imported product next year.

Next week

The BOM’s cumulative week ahead rainfall forecast for much of the east coast is a lot more moderate, at sub 10mm, except for VIC, which is tipped for another 25mm. However, paddocks are still pretty muddy, there are repairs to be done, and a lot of roads remain closed, so yardings will likely remain relatively subdued. While the rain has brought a solid moisture profile, in some areas pastures may have damage from the inundation and it may take producers several weeks to get a clear picture of the likely impact on their available feed this season, and whether resting paddocks will be necessary.  

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Data sources: MLA, Mecardo

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