Cattle herd drover

Little excitement in cattle markets this week, with prices, on the balance, largely drifting sideways. The main points to note are that restocker steer volumes plunged dramatically this week, yet prices only edged up a smidgen despite the sudden tightening of supply, and that prices for finished cattle strengthened.

Another week, another decline in slaughter numbers. Last week’s east coast slaughter volume slipped 6% on the prior week. The drop was in line with the pattern we saw in September 2021 however, keeping in mind, volumes are 6% below that of the same time last year.

Preliminary yarding numbers for this week sit at around 27K head, a substantial drop of 7k head, or 29% from the prior week. The majority of the decrease in numbers emanated from QLD, which saw a 6K head (40%) week on week fall, with Charters Towers & Dalby dropping sharply, Roma Store numbers remaining historically light though Emerald bucked the trend, offering the highest yarding since early May.

The Eastern states Young Cattle Indicator (EYCI) declined 13¢(1%) this week to settle at 1,036¢/kg cwt, with eligible yardings remaining on par with last week. Despite operating with well below average weekly yardings, Roma store contributed 15% of the index, at an average price of 1,020¢/kg cwt, followed by Gunnedah &  Dalby, which recorded prices of 1,0928¢/kg cwt and 1,001¢/kg respectively. At Singleton and Casino, prices were elevated, at 1,127¢/kg and 1,121¢/kg cwt respectively.

The Western Young Cattle Indicator (WYCI) remained steady this week, at 956¢/kg cwt, with the vealer percentage also remaining unchanged, while steer prices crept up 49¢ to 1,034¢/kg cwt. The big surprise was a huge jump in yardings to 482 head. Prices holding despite the increase in supply is a positive indication of strength in demand for cattle.

The national indicators were another mixed bag of results this week, with medium steer prices recovering 27¢(6%), to close at 460¢/kg lwt. Cow prices also lifted 4% to 356¢/kg lwt. In contrast, prices for vealers, feeders and processor steers slipped from the prior week.

The latest prices for 90CL indicated that prices remained static from the week prior, but the steep drop in the Aussie dollar against the greenback of over 2% this week, down to sub US67¢ will provide a solid boost in the coming week, improving the competitiveness of our offering.  Steiner reports that Chinese demand for Beef may be in trouble next year, as a USDA report from the Beijing embassy forecasts that Chinese beef imports may drop as much as 19% in 2023, which would increase flows of south American beef into the US.

The week ahead….

The support for prices in Aussie cattle markets appears to mainly be coming from a tightening supply side, particularly with regard to reductions in volumes in QLD, and restocker activity appears to be dropping off. This is a concerning trend that needs to be monitored closely, as the expanded herd means that there are still a substantial amount of cattle out there waiting to be marketed.

The northern monsoon season in November is almost upon us however, and how strongly it starts off will be the main impetus behind a renaissance in restocker demand.

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Data sources: MLA, Mecardo

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