Slaughter down, but restockers still keen as ever

Northern cattle in yard

Last week yardings fell into an abyss, down 22% on the week prior, supporting the EYCI’s rise of 1% for the week. This was driven mostly by restocker activity, offsetting weaknesses in prices for cattle destined for slaughter.

Good rainfall in QLD saw east coast yardings tank from the previous week as producers held onto their stock. The drop in yardings was led by large falls in NSW (-36%) and QLD (-21%) and a moderate 10% dip in VIC. However, SA bucked the trend, with yardings increasing, with its token effort marginally offsetting the big falls seen from the other eastern states. Overall a 22% decrease in numbers saw 44,989 cattle yarded for the week ending 17th July, which is well and truly below the five-year average and figures seen at the same time last year.

Slaughter numbers slipped lower (4%) on the week prior, mostly driven by a sharp 20% fall in VIC, with some likely impact of COVID-19 related processor closures. Conversely, NSW ticked up slightly, while SA and QLD ambled along steadily. A total of 117,156 cattle were processed, which is down 21% compared to the same time in 2019.

The Eastern Young Cattle Indicator (EYCI) lifted 1% on the prior week, settling at 753¢/kg cwt.

This week was a story of restocker activity and tight supply providing support, counterbalanced by weakness in trade animals dragging the overall market back down to earth.

Vealer steers were down 4.7%, falling 19¢ to 391¢/kg, similarly, Medium cows lost 4.1%, down 11¢ to settle at 257¢/kg lwt. Medium and heavy steers also lost ground, sacrificing 1% to settle at 339¢/kg lwt, and 351¢/kg lwt, respectively.

Restockers and feeders were the heroes of the market this week, posting minor gains.

Restockers gained 2¢ to 430¢/kg lwt and feeders sidled up 1¢ to 392¢/kg lwt, while processor yearling steers were probably picked up by restockers, edging up 1¢, to close the week at 388¢/kg lwt.

Crossing the ocean to our key US export market, The 90CL Frozen Cow price held its ground, rock steady at 684¢/Kg. The aussie dollar, however, has shown strength over the last week, gaining 1¢, clawing its way up to 0.71 US. If the upward trend continues, this may start to threaten export volumes as Australia’s price competitiveness suffers as a consequence.

Next week

Low yarding numbers driven by favourable conditions for producers in QLD and NSW, combined with some VIC sellers concerned about plant closures. Midfield Meat International at Warrnambool has temporarily closed as a precautionary measure. With more rain forecast this weekend in NSW, and the COVID-19 situation in Victoria unlikely to end any time soon, a flood of cattle to yards is unlikely in the short term.

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Data sources: MLA, Mecardo

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