Lower temperatures but opportunity warming up?

The Eastern Young Cattle Indicator this week has eased 14 cents (2.3%) after a 12% increase in throughput to the yards (16K).  Trawling through saleyard reports, for the most part, the cattle available were on the lighter side.  As a result, more cattle found their way back to the paddock this week compared to last, as the number of yearling steers and heifers sold to restockers lifted 99% and 43% respectively, albeit at a more affordable price point.

Whilst the female slaughter ratio tells us we aren’t in a herd liquidation, plenty of cattle have exited the paddock this year, and if there is confidence in feed and stock are at a lower price point, those who want to go again might be looking for ideal stock in the weeks to come. As the mercury drops, bidding continues to be more selective, Restocker yearling steers were flat to 330c/kg lwt and Restocker heifers declined 10 cents to 236c/kg lwt. 

Processor cow throughput essentially tracked sideways, and the indicator finished the week 4 cents lower to 217 c/kg lwt.  Saleyard reports from Roma, Dalby and Wodonga all cited the presence of additional processor buyers for cows this week.  While we have seen the 90CL come off 9% after the high tide mark at the beginning of May, in the depths of Winter cows still look to be value buying for processors.

Figure 2 shows the Processor Cows basis to the Eastern Young Cattle Indicator. At a national level, cows destined for the abattoir are selling at a 49% discount (dressed weight) to young cattle as of this week.  Supply, Demand and saleyard pricing are incredibly dynamic and change week to week, but we can see the impact of the wider trends dictating buyers’ thought processes.   When we look at the beginning of February 2023, (when the processor cow discount was the same, 49%), the 90CL was 707 AUc/kg, today it’s 886 AUc/kg, 25% higher. Processors can see that it’s definitely worth getting in the car to have a look at what’s happening at the yards.