The Eastern Young Cattle Indicator (EYCI) declined 11¢ this week to 564¢/kg cwt. This was a 1.9% decline week on week but in the context of the last 12 months, recently young cattle prices in the east have tracked sideways. Similarly, restocker steers in Queensland (the bulk of the restocker market at this time of year) also lost 11¢ to sit at 320¢/kg lwt.
Feeder steers have had a positive July, both in terms of market sentiment and pricing. NSW feeder steers are up 12¢ for the month and Queensland feeders are up 18¢ month on month per MLA. Processor cows have also had a spring in their step post-financial year, with a 9¢ improvement this week to 217¢/kg lwt for the national processor cow indicator.
In recent weeks, the Mecardo team have discussed the differing levels of decline amongst cattle indicators, with finished cattle pricing seeing relatively less decline than younger cattle. This week however we did see the easing of heavy steer prices nationally. In NSW heavy steers, saw a 9¢ decline to 277¢/kg lwt and in Queensland, a 3¢ easing saw the indicator finish at 272¢/kg lwt.
Slaughter is continuing to be elevated throughout the winter in comparison to 2022, however, the level of activity we are seeing on the East Coast still doesn’t reach above the 5-year average in the same period. The previous week’s east coast slaughter sits 2.2% below the 5-year average but sits 20% above 2022 levels. Preliminary reports of 40k yardings on the East Coast for this week would be almost 10 000 head below the 5-year average for the same week last year.
July looks as if the cattle industry has been kicking the can down the road on decision-making for selling and buying. Margins for both producers and processors might not be at a level where stakeholders are willing to pull the trigger. Restocking and feeder market-wise, current grain prices and the certainty of uncertainty with grain markets might have feedlotters second-guessing timing. And despite the improved competitiveness of Australian lean beef prices in export markets relative to competitors, the reports of large cold store supplies in importing countries indicate there is still stock to work through.
The supply surge of 2023 has been steady and not the Band-Aid rip that many expected with the drier outlook. The passing of time presents its own challenges and margin calls for producers and processors. How supply progresses through the rest of the year will depend on what blinks first, feed availability or export demand.