Cows in pasture paddock

Cattle yardings fell this week to a touch over 38,000 head, which was the lowest volume to go through the yards since the first week of July. Slaughter continued to rise however, and although is a week delayed from yardings, does demonstrate that producers are perhaps more keen to go direct and know their returns rather than risk the market at the moment.

At 127,337 head for the week to Sunday, it was the highest National Livestock Reporting Service recorded weekly slaughter volume for the year-to-date and about 34,500 head more than the same week last year. Another interesting figure is the female slaughter – at nearly 49% last week, compared to about 42% in the corresponding week in 2022.

The national feeder steer price lost more ground this week, dropping a further 16¢/kg even with 1500 head less cattle eligible for the indicator. As scary as it is to think about, we are hitting the period where cattle going onto feed now will be ready for processing over the summer holiday period, when many processors have slowdowns or shutdowns, so lotfeeders aren’t looking for
numbers. Along that same timeline, concern about how current restrictions and suspensions on certain live export yards for cattle destined for Indonesia seem to be rising, as the wet season closes in. An already full domestic market is unlikely to absorb many from this – especially at the right price for producers – if the trade slows down even further.

Restocker yearling steers and the Eastern States Young Cattle Indicator fell even more than the feeder price, losing 24¢/kg and 33¢/kg respectively for the week. This takes the restocker steer price to a 10% discount to the heavy steer indicator, which picked up nearly 12¢/kg in the past seven days. In comparison, AuctionsPlus recently reported that on their calculations, the restocker steer has been trading at an average of 18% premium to heavy steers since 2016. At 447¢/kg, the EYCI continues to find new lows for this cycle, now more than $6/head short of the same time last year.

National processor cows showed some resilience this week, now having lifted slightly from their sub-200¢/kg low to about 206¢/kg, up 8¢/kg for the week and only having lost 3¢/kg for the month.
Meat and Livestock Australia reports this week that US total slaughter is down 28% year-on-year, but the female kill still indicates the herd is in destocking mode – meaning the slaughter should drop further when that rebuild stage is hit. Latest export data shows year-to-August volumes from Australia to the US are already up 62% (compared to total exports up 20%).

Next week

With slaughter still going up, there’s likely little reprieve for producers on the supply side of the equation. This could be further escalated by the issues in the north with Indonesian access, and some areas already calling a dry spring. The latest export volume data is good for the demand scenario, however the value side likely tells a different story.

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Click on graph to expand

Click on graph to expand

Data sources: MLA, AuctionsPlus, Mecardo

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