Rain revival for the cattle market?

Cows in pasture paddock

Widespread and heavy rain is falling in key cattle country, and it’s enough to disrupt the flow of cattle to market. After short weeks due to holidays, near-term supply in the north is likely to tighten up with buyers expected to pay up to fill any gaps in the weeks ahead.

In the last week, central and southern Queensland received a drenching, with up to 100mm falling in parts. The BOM’s 4-day forecast shows that eastern QLD and NSW are next in line. 25 to 100mm is expected across large areas. After what can be described as a lacklustre cattle market, the impact of this rain event will surely be a positive one.

Already we’ve heard that the rain in southern QLD last week has caused difficulty in moving cattle. We witnessed a significant dip in cattle movement, with yarding numbers tumbling from the bustling 60-80,000 head per week earlier in March to a mere 35,000 this week, reflecting the impact of the short easter week, QLD’s rainy spell and the forecast wet on the cattle market’s rhythm.

The short working weeks and rain are likely to create some shortfalls in cattle reaching abattoirs and feedlots. This, and more interest from restockers is likely to result in price upside. However, it may only be fairly short-lived given supply has been ample, and once conditions dry out the numbers will still come forward.

The feeder steer market is picking up steam once more, rebounding from its steep descent since February. Argus reported their Northern Feeder Steer price at 338¢/kg this week, driven higher by rain and slowing supply, signalling a refreshing turn. Young cattle prices showed minimal movement this week, but cow prices are still on the up. The National Processor Cow Indicator gained 10¢ this week, despite stronger saleyard throughput. With 90CL export beef prices continuing to find strength from tightening US production, cow prices have been on the improve for the last fortnight but remain around 30¢/kg lwt below the highs of early February. 

Next week

A disrupted week of cattle supply is on the cards for the week ahead in the north which should provide a price boost for the cattle that do make it to yards. We are likely to see supply tightness ahead as producers wait for the market to firm up, but this will push the cattle down the road, so to speak, hitting the market later in Autumn or early Winter. Another positive of this rain event is that we will see oats planted across southern Queensland for the winter crop.

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Data sources: MLA, BOM, Steiner Consulting Group, Mecardo

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