Herd size, slaughter, production, and exports are all on the rise. Prices on the other hand, not so much. The cattle market remained stagnant again this week, with prices mainly firm despite a 30% rise in yardings. The latest cattle industry projections were also released this week and by all accounts, there is very little indication that there will be any significant uptick in the market, in fact, we likely haven’t seen the bottom yet.
The Eastern Young Cattle Indicator (EYCI) was steady this week, closing at 566¢/kg, still operating at about half the price it was this time last year. Roma held another store sale this week and made up for more than 30% of EYCI-eligible cattle. It did little for the EYCI, with restockers taking up more than half the eligible cattle and paying 13¢/kg less than they did the week prior, and about 12¢/kg less than feeders. It did however help lift the restocker yearling heifer price by 12¢/kg week-on-week.
We are being encouraged to look more widely than the EYCI at the moment, with such little restocker activity in recent weeks (rain this week has boosted that slightly though). The Heavy Steer Indicator picked up marginally this week, to 275.91, but has still lost nearly 15¢/kg for the month. That said, as we can see in the chart, it has been moving back towards the EYCI all year and is trading at 36% below the same time in 2022. While still a significant drop, this is 10% less of a fall than the EYCI.
Supporting finished stock prices are beef exports. They lifted 14% year-on-year for the month of May, and were up 27% on the previous month, bringing volumes to their highest level since 2020. Australia’s increased herd numbers and the development of the rebuild phase means grassfed exports are back to well outstripping grainfed exports. This is exemplified by exports to the US (which predominantly takes cull cows for lean beef) being up 63% for May compared to the same month in 2022.
Throughput-wise, the latest slaughter figures (last week’s) fell slightly on the week prior but were still more than 40% higher year-on-year. Weekly average slaughter numbers for the month of May were 30%, (or 24,000 head), higher than in May 2022, according to MLA, and year-to-date slaughter has risen 26%. Their projections expect slaughter to be up 18% year-on-year at the end of 2023, which would be the highest number since 2020, but still below the 10-year average. Yardings this week went the opposite; up 30% compared to the week prior, but 6% below year-ago numbers.
Next week
Both the short and medium-term price forecasts in MLA’s projections have cattle prices continuing to decline through to the end of the year, as ample supply means buyers of all categories can be more selective, and in the case of processors and feeders, offering the potential to perhaps claw back some of the higher ground they’ve not seen in the past few years.
The long-predicted slowdown in US beef production has seemingly come into play this year, and Australian beef is filling some of the production gaps. Total
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In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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Restockers surface but not enough for price boost
The Eastern Young Cattle Indicator (EYCI) was steady this week, closing at 566¢/kg, still operating at about half the price it was this time last year. Roma held another store sale this week and made up for more than 30% of EYCI-eligible cattle. It did little for the EYCI, with restockers taking up more than half the eligible cattle and paying 13¢/kg less than they did the week prior, and about 12¢/kg less than feeders. It did however help lift the restocker yearling heifer price by 12¢/kg week-on-week.
We are being encouraged to look more widely than the EYCI at the moment, with such little restocker activity in recent weeks (rain this week has boosted that slightly though). The Heavy Steer Indicator picked up marginally this week, to 275.91, but has still lost nearly 15¢/kg for the month. That said, as we can see in the chart, it has been moving back towards the EYCI all year and is trading at 36% below the same time in 2022. While still a significant drop, this is 10% less of a fall than the EYCI.
Supporting finished stock prices are beef exports. They lifted 14% year-on-year for the month of May, and were up 27% on the previous month, bringing volumes to their highest level since 2020. Australia’s increased herd numbers and the development of the rebuild phase means grassfed exports are back to well outstripping grainfed exports. This is exemplified by exports to the US (which predominantly takes cull cows for lean beef) being up 63% for May compared to the same month in 2022.
Throughput-wise, the latest slaughter figures (last week’s) fell slightly on the week prior but were still more than 40% higher year-on-year. Weekly average slaughter numbers for the month of May were 30%, (or 24,000 head), higher than in May 2022, according to MLA, and year-to-date slaughter has risen 26%. Their projections expect slaughter to be up 18% year-on-year at the end of 2023, which would be the highest number since 2020, but still below the 10-year average. Yardings this week went the opposite; up 30% compared to the week prior, but 6% below year-ago numbers.
Next week
Both the short and medium-term price forecasts in MLA’s projections have cattle prices continuing to decline through to the end of the year, as ample supply means buyers of all categories can be more selective, and in the case of processors and feeders, offering the potential to perhaps claw back some of the higher ground they’ve not seen in the past few years.
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Click on graph to expand
Data sources: MLA, Mecardo
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The long-predicted slowdown in US beef production has seemingly come into play this year, and Australian beef is filling some of the production gaps. Total
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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.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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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.