Prices are absolutely flying. Tight supply of ideal feeders and rain have been the key drivers. As far as winter price premiums go its early and steep. Restocking demand has been rampant in winter after this bit of rain. Supply dropped again this week, and whilst the price rise wasn’t as strong as previous weeks, demand remains in a bit of a purple patch.
MLA saleyard reports as always make for interesting reading, the dry driven liquidation sales we saw in Northern NSW just a month or two ago have now turned into highly competitive weaner markets, with tight supply and high-quality cattle pushing prices higher in Armidale and Tamworth. Roma and Dalby were competitive for steers and future planning, less so for turnoff stock. Lighter cattle are returning to Victorian paddocks via Wagga. This week feeder steer and heifer indicators both improved 11¢ WoW with both now over $5/kg lwt. Restocker interest in heifers also pushed that indicator higher by 12¢ to 478¢/kg lwt. (See Indicator Table).
Further from home and beef markets appear to be in the calm before the storm. The China quota has been met; South Korea quota limits are fast approaching; US beef demand seasonality is at its peak and about to ease; Brazil has about a month left before its runway for Chinese demand is slammed shut and export beef prices have slowly been tracking lower. It’s likely that beef prices will drop, as more affordable south American manufacturing beef clashes with our own into the states. What’s uncertain is the extent of price decline between now and Christmas.
The 90cl in Aussie dollar terms sit at 1113¢/kg which is still 17% higher than this time last year so even with some price correction the markets still in a good spot to sell volumes and compete. What might change is the willingness to push prices higher for stock headed to the abattoir. This week the National Heavy steer indicator eased 20¢ WoW to 808¢/kg cwt and Processor cows were flat. Cattle prices are now just at an 8% discount to the 90cl and even though confidence is high, margins from the processor and exporter side will begin to be pressured. Exporters will be getting less for beef and cattle cost more for processors to acquire, one typically has got to give.
In the meantime, for producers as long as it keeps raining, demand for cattle destined for feed and backgrounding will remain strong. Dams still need filling in the south but if high quality yearlings are available there are still buyers in the south that want them (if they can outbid the feedlots).
Next week
Expect supply to bounce back somewhat as producers aim to take advantage of current prices for young cattle. There is plenty of cattle in the North still to come after years away from the yards. Premiums for ideal feedlot articles can be had in this market currently. China is shut for now but it’s not that long to go before it opens back up and you’d want to be on pole position.
High prices have cattle heading to the market as supply remains strong for winter. Prices eased slightly but remain elevated. Numbers, quality and weights remain
Recent rain which has sent young cattle markets into overdrive have overshadowed some of the developing headwinds, especially for finished cattle. The latest beef export
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Prices are flying and weaners are on the move
Next week
Expect supply to bounce back somewhat as producers aim to take advantage of current prices for young cattle. There is plenty of cattle in the North still to come after years away from the yards. Premiums for ideal feedlot articles can be had in this market currently. China is shut for now but it’s not that long to go before it opens back up and you’d want to be on pole position.
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Data sources: MLA, Mecardo
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Recent rain which has sent young cattle markets into overdrive have overshadowed some of the developing headwinds, especially for finished cattle. The latest beef export
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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.