cattle_016

Cattle slaughter rates have reached levels not seen since 2020, and so this week’s big beef news of China removing import suspensions on five Australian processors should help to absorb the rising production volumes. While Aussie beef has still been flowing to China this year at near average levels, the regained access for another five processors is set to open the door for more trade opportunities.

The Eastern Young Cattle Indicator dropped back under the $6/kg mark after losing 22¢ over the week. Dalby, Roma store and Casino sale reports noted well-bred lined met fair demand however prices suffered on cattle of lesser quality and roughness in the coat. Restockers were the most active buyers of vealer and weaner cattle this week, paying on average 17¢ or 3% more than feeder buyers.

In the West, the smell of rain saw young cattle hold their value after last week’s rally. The Western Young Cattle Indicator rose 2¢ to 490¢/kg cwt.

Supply & processing capacity continues to be the enemy of cow prices. The National Processor Cow Indicator dropped 15¢ over the week to 203¢/kg cwt. While prices are slightly higher year on year, cows are trading back at the lower end of the range for 2024 in eastern states. The rain that’s fallen this week as well as that on the forecast for next, is likely to see some slight decline in cow numbers being offloaded, however in other parts of the country water logged paddocks and depleted feed will halt any significant decline.

Feeder and heavy steer prices at saleyards held their levels this week, declining just 2 & 1¢ respectively. Seasonal tightening of angus feeders is driving stronger prices, but this is in contrast to cross-bred feeders that continue to flow in big numbers.

The weekly slaughter figures very clearly show where the pressure point is in the market. For the week ending the 24th of May, 139,285 cattle were processed nationally. This is the biggest week of slaughter since 2020, and was 20% more cattle processed than the same week last year.

Next week

Rising slaughter rates are a positive that processors are increasing capacity, but this will only go so far. We expect supply will remain elevated through June due to strong herd numbers, although another dose of heavy rain in key cattle areas may cause some short-term disruptions.

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Data sources: MLA, Steiner Consulting Group, BOM, Mecardo

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