The Eastern Young Cattle Indicator (EYCI) backtracked another 13¢ (2%) this week, coming to rest at 669¢/kg cwt. Prices for young cattle haven’t been this low in nominal terms for more than three years, and we are now operating at a level 40% below where we were a year ago. In the depths of the 2019 east coast drought, prices reached well below the 500¢/kg mark before rocketing quickly to around current levels in the space of a couple of months.
Currently, the supply of young cattle across the east coast is very strong, after being subdued by the rain in Queensland, the offering at Roma exploded sixfold to 6,800 head, returning it to its rightful place as the index’s top contributor for the week. Roma steers traded at 790¢/kg cwt. Dalby, Gunnedah, and Tamworth were next in line, making up 27% of the index between them, with steers making 726¢/kg, 718¢/kg, and 716¢/kg respectively.
Overall, east coast yardings snapped back quickly, pegging a 47% week-on-week increase as Queensland offerings made a welcome return to the market. Victoria was also back in action after the public holiday interruptions with a 70% week-on-week surge in yardings.
The national indicators also suffered under the onslaught of increased supply, with red ink across the board without exception. The week’s wooden spoon went to processor cows, where the index fell back 9¢ (3%) to close the week at 251¢/kg lwt. Feeder steer prices were also soft, retreating 8¢ (2%) to finish at 251¢/kg lwt.
The latest slaughter stats for the week ending 17th March 2023 indicated a slight 4% contraction from the week prior. It appears that Queensland operations were relatively unaffected by the rains, but Victorian numbers fell back by 24%, probably on account of the disruption of the public holiday. At 106K head, throughput remains 22% above 2022 levels, with processors taking advantage of improved labour availability and reduced cattle prices.
The US frozen cow 90CL price pushed up another 15¢ (2%) to reach 845¢/kg. Driven from a native 7¢(3%) increase in the US price to US256¢/lb, offset by a 1% strengthening in the Aussie dollar against the greenback. Imported lean prices in the US were pushed higher, as the US domestic market comes to terms with diminishing supply. US cow slaughter continues to track lower, now at 8% below 2022 levels. Macroeconomic conditions in the US appear to have deteriorated because of the risks flowing from the recent banking crisis. As Steiner points out in this week’s latest report, negative changes in consumer spending tend to kick in after recessions have taken place, as the impact of increased unemployment flows through the economy. Given the US employment situation is still solid, a downturn in US beef demand is more of a forward risk, so the US beef outlook remains rosy for now.
Rain delay over as supply bounces back
The Eastern Young Cattle Indicator (EYCI) backtracked another 13¢ (2%) this week, coming to rest at 669¢/kg cwt. Prices for young cattle haven’t been this low in nominal terms for more than three years, and we are now operating at a level 40% below where we were a year ago. In the depths of the 2019 east coast drought, prices reached well below the 500¢/kg mark before rocketing quickly to around current levels in the space of a couple of months.
Currently, the supply of young cattle across the east coast is very strong, after being subdued by the rain in Queensland, the offering at Roma exploded sixfold to 6,800 head, returning it to its rightful place as the index’s top contributor for the week. Roma steers traded at 790¢/kg cwt. Dalby, Gunnedah, and Tamworth were next in line, making up 27% of the index between them, with steers making 726¢/kg, 718¢/kg, and 716¢/kg respectively.
Overall, east coast yardings snapped back quickly, pegging a 47% week-on-week increase as Queensland offerings made a welcome return to the market. Victoria was also back in action after the public holiday interruptions with a 70% week-on-week surge in yardings.
The national indicators also suffered under the onslaught of increased supply, with red ink across the board without exception. The week’s wooden spoon went to processor cows, where the index fell back 9¢ (3%) to close the week at 251¢/kg lwt. Feeder steer prices were also soft, retreating 8¢ (2%) to finish at 251¢/kg lwt.
The latest slaughter stats for the week ending 17th March 2023 indicated a slight 4% contraction from the week prior. It appears that Queensland operations were relatively unaffected by the rains, but Victorian numbers fell back by 24%, probably on account of the disruption of the public holiday. At 106K head, throughput remains 22% above 2022 levels, with processors taking advantage of improved labour availability and reduced cattle prices.
The US frozen cow 90CL price pushed up another 15¢ (2%) to reach 845¢/kg. Driven from a native 7¢(3%) increase in the US price to US256¢/lb, offset by a 1% strengthening in the Aussie dollar against the greenback. Imported lean prices in the US were pushed higher, as the US domestic market comes to terms with diminishing supply. US cow slaughter continues to track lower, now at 8% below 2022 levels. Macroeconomic conditions in the US appear to have deteriorated because of the risks flowing from the recent banking crisis. As Steiner points out in this week’s latest report, negative changes in consumer spending tend to kick in after recessions have taken place, as the impact of increased unemployment flows through the economy. Given the US employment situation is still solid, a downturn in US beef demand is more of a forward risk, so the US beef outlook remains rosy for now.
The week ahead….
Historically, towards the end of March is when we start to see a decline in the supply of cattle at the saleyards, which could help ease the current downward pressure on prices.
We should also hear some news about whether China will lift its ban on Brazilian beef soon. Other countries imposing a ban such as Thailand, Iran, Russia, and Jordan are likely to follow China’s lead.
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Data sources: MLA, Steiner, Argus, Mecardo
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