Volatile rainfall across the country, the
Middle East conflict driven energy shock and even a new trade deal for
Australia are all factors that will look to impact the cattle market in the
coming months. This week at least the market reaction to lighter cattle and
higher costs was an easing of saleyard cattle indicators.
Much needed Rainfall has fallen in the last few months across Australia, many of it in key regions for Australian cattle market. The Riverina and Northeast NSW have experienced below average or worse rainfall this summer however and as a result, producers are beginning to push lighter stock to market in these regions.
Per MLA saleyard reports this week, the culmination of an upcoming easter shutdown and higher percentages of lighter weight cattle pushed indicators lower this week. Roma store sale saw buyers chasing quality, leaving lower weight and quality types to drag prices lower. To Dalby and export buyers in particular were operating more selectively, impacting overall market sentiment. Wagga and Dubbo saw lower numbers, fewer buyers and a higher proportion of lightweight cattle exiting the farm as producers shift focus to winter stocking rates.
For the most part indicators saw moderate declines week on week (Figure 2), with feedlot and restocker steers 6¢ lower WoW and the rest averaging 10-12¢ lower. The standout decline this week was the 26¢ WoW decline of the processor cow indicator to 348¢/kg lwt (644¢/kg cwt).
Meat & Livestock Australia’s cattle projections were released and it includes a revision to the national herd slightly lower but still above 30 million head (read more here). Jamie-Lee Oldfield broke down the numbers this week on Mecardo (read more here). Slaughter is forecast to climb to 9.45 million head this year as strong prices and cattle on feed number growth support consistent high levels of production. It looks to be a bumper year for beef production again this year, but the industry is not completely immune to the impacts of rising fuel costs, vessel delays and growing lead times as a result of the Middle East Conflict.
Frozen beef trade will no doubt be impacted as a result of higher vessel fuel and insurance costs and longer lead times and travel. Rerouting freight already in transit towards more stable customers (the US) might stall some of the momentum we have seen recently in terms of production and demand. Until we get through the easter shutdown period, it will be uncertain whether there is going to be more structural changes to cull cow demand in the coming few months. Fundamental demand for Australian beef remains strong, the crocodile closest to the canoe for the post gate supply chain at the moment is ensuring efficient transport of this product to eager overseas buyers which will inevitably see some backlogs as exporters sift through the complexity.
The week ahead….
Shorter week and lower supply would be supportive prices next week, but the quality and weight of offered cattle at the moment is swaying prices more so than overall supply and demand factors.
Australian beef exports have steamed through March coming in just shy of 150,000, making it the second-highest monthly export volume on record. Consistently strong supply
After the easter break the uneven balance of yardings and slaughter numbers typically mask underlying sentiment of the market. Uncertainty of diesel costs and wide-ranging
The Meat and Livestock Australia (MLA) Cattle Industry projections were released last week. The Industry Projections are an important outlook for cattle supply, being herd
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Lighter cattle come forward
Much needed Rainfall has fallen in the last few months across Australia, many of it in key regions for Australian cattle market. The Riverina and Northeast NSW have experienced below average or worse rainfall this summer however and as a result, producers are beginning to push lighter stock to market in these regions.
Per MLA saleyard reports this week, the culmination of an upcoming easter shutdown and higher percentages of lighter weight cattle pushed indicators lower this week. Roma store sale saw buyers chasing quality, leaving lower weight and quality types to drag prices lower. To Dalby and export buyers in particular were operating more selectively, impacting overall market sentiment. Wagga and Dubbo saw lower numbers, fewer buyers and a higher proportion of lightweight cattle exiting the farm as producers shift focus to winter stocking rates.
For the most part indicators saw moderate declines week on week (Figure 2), with feedlot and restocker steers 6¢ lower WoW and the rest averaging 10-12¢ lower. The standout decline this week was the 26¢ WoW decline of the processor cow indicator to 348¢/kg lwt (644¢/kg cwt).
Meat & Livestock Australia’s cattle projections were released and it includes a revision to the national herd slightly lower but still above 30 million head (read more here). Jamie-Lee Oldfield broke down the numbers this week on Mecardo (read more here). Slaughter is forecast to climb to 9.45 million head this year as strong prices and cattle on feed number growth support consistent high levels of production. It looks to be a bumper year for beef production again this year, but the industry is not completely immune to the impacts of rising fuel costs, vessel delays and growing lead times as a result of the Middle East Conflict.
Frozen beef trade will no doubt be impacted as a result of higher vessel fuel and insurance costs and longer lead times and travel. Rerouting freight already in transit towards more stable customers (the US) might stall some of the momentum we have seen recently in terms of production and demand. Until we get through the easter shutdown period, it will be uncertain whether there is going to be more structural changes to cull cow demand in the coming few months. Fundamental demand for Australian beef remains strong, the crocodile closest to the canoe for the post gate supply chain at the moment is ensuring efficient transport of this product to eager overseas buyers which will inevitably see some backlogs as exporters sift through the complexity.
The week ahead….
Shorter week and lower supply would be supportive prices next week, but the quality and weight of offered cattle at the moment is swaying prices more so than overall supply and demand factors.
Have any questions or comments?
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Data sources: Mecardo, MLA, DAFF, DFAT, BOM
Categories
Have any questions or comments?
Bumper numbers out of NSW motivate buyers to hit the road
With Northern NSW saleyards getting a flush of supply, buyers are hitting the road on the lookout for value leaving some empty car spaces at
Chinese deadline pushes exports higher as EU FTA disappoints
Australian beef exports have steamed through March coming in just shy of 150,000, making it the second-highest monthly export volume on record. Consistently strong supply
Short week, minor decline
After the easter break the uneven balance of yardings and slaughter numbers typically mask underlying sentiment of the market. Uncertainty of diesel costs and wide-ranging
Relating cattle supply to price
The Meat and Livestock Australia (MLA) Cattle Industry projections were released last week. The Industry Projections are an important outlook for cattle supply, being herd
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.