Steer sentiment solid, but cows & 90CL on the nose

Angus steer close up

Warmer weather and more paddocks drying out have continued to fuel supply in parts of Northern Australia, with Roma offering the largest yarding seen in six months, and supply in SA and VIC also continued to rise. After last week’s flush of supply soaked up some of the pent-up demand, this week saw softer prices across the board. The sentiment is that while demand is still firm for steers, interest in cows & heifers has comparatively waned- the fall in the 90CL price and weaker US demand might just have something to do with that.

East coast slaughter for the week ending the 11th November 2022 lifted 6% week-on-week to 96,861 head. More than half of the increment came from QLD, which booked a 6% rise, helped along by a 5% increase in NSW slaughter, and 10% in VIC. SA chipped in a solid contribution too, on the back of a 26% week-on-week increase.

The Eastern States Young Cattle Indicator (EYCI) backtracked 32¢(3%) for the week, most likely as a result of softer demand in the aftermath of the huge offering last week. Eligible EYCI yardings fell 10% week-on-week from a high base, down to 13,473 head. Roma store topped the contributor list at 35% of the index, on the back of the strongest yarding seen since July, although quality was reported as inconsistent. This was followed by Dalby at 20% and Wagga at 9%. Roma Steer prices sat at 1,021¢/kg, cwt while Dalby steers fetched 1,010¢/kg cwt, and Wagga managed 1,0352¢/kg cwt. Overall, demand for steers has been reported as firm, but interest in cows, heifers and bullocks has shown a trend of reduced enthusiasm. The national Cow price slipped 54ٕ¢(8.3%) week on week to 596¢/kg cwe.

The Western Young Cattle Indicator (WYCI) advanced just 3¢ (<1%) this week to close at 996¢/kg cwt. Average steer prices, plummeted by 99(11%) to settle at 821¢/kg cwt, with the 83% vealer proportion in the index the main source of support. Eligible yardings rose 22% to 1271 head, the highest volume seen this year so far. That being said, an influx of weaner cattle to the yards in November is nothing unusual as it is a seasonal event.  

MLA’s preliminary national yardings data for this week revealed that supply dropped off from last week’s high. Saleyard volumes in QLD, and NSW both dropped back, however, SA and VIC supply accelerated, with VIC yardings the largest seen since May this year, while SA booked the second largest yarding of the year.   

The national indicators all displayed weakness without exception. Feeder steer and medium steer prices plunged the most, down 4.2% and 4%. Heavy steer’s held up the best against the downward trend, only slipping 10ٌ¢(2%) to 419¢/kg.

The 90CL frozen cow price slipped back 3.5¢/lb (~12¢AUD) in US dollar terms last week, to 240.5¢/lb. A strong recovery in the value of the AUD against the greenback recently created downward pressure on the 90CL price. In Australian dollar terms, the 90CL dropped 32¢(4%) to 809¢/kg swt. Steiner continues to report that US buyers remain nervous about recession and therefore demand prospects in 2023. As such, US buyers are reluctant to make purchases, as they don’t want to be caught with a high priced book of inventory in a falling market. NZ is expected to push higher volumes of lean beef into the marketplace prior to Christmas processor shutdowns. Steiner are predicting weekly NZ bull slaughter to increase six-fold between October and December, adding to negative sentiment about price.

Next week

While prices have fallen recently, the bright spot on the horizon is a healthy trend of increasing slaughter. As expected, the surge in supply last week has lost momentum, and the fall in prices along with transport challenges will hold some cattle away from yards, particularly in NSW and parts of QLD. Further south, there is potential for selling pressure to be maintained for a bit longer as backlogs of marketing intentions are worked through.

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Click on graph to expand

Click on graph to expand

Data sources: MLA, Mecardo

Photo Credit: Sally Grundy “Mundoo Angus Steers”

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