Figure 1 shows cattle slaughter took a dive last week and is likely to have spent this week at similar levels. Cattle slaughter is not as low as Easter last year, but did see its lowest week for 2020. It is probably not bad timing for processors, who are likely still seeing some pretty significant demand swings.
This week the improving Aussie dollar saw export prices in our terms weaken. The 90CL Frozen Cow Indicator was steady in US terms, but 16¢ lower in our terms at 748¢/kg swt. Figure 2 shows the 90CL is still well above the lows hit back in March and apart from the spike late last year, it has never been better.
There are positive signs for export beef demand from the US. According to The Steiner Consulting Group, cattle slaughter in the US has fallen heavily with a COVID-19 outbreak at two plants putting production on hold. Closures are expected to be short term, but they will put pressure on beef supplies, while seeing cattle prices fall.
Locally, feeder cattle prices rallied this week, with the National Indicator up 12¢ to 368¢/kg lwt. Tight supply remains the driver of the store cattle market.
Heavy Steers and Cows were down, according to National Indicators, but this might have been due to intermittent sales. We will know more next week.
Volatility and uncertainty but supply remains the driver
Next week
There are plenty of reasons for cattle prices to fall, with shifting demand, a volatile currency and rising wheat prices all applying pressure. However, the main driver for the time being remains supply, which is unlikely to improve until the spring.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Data sources: MLA
Categories
Rain and Restockers return
A short selling week saw yardings down significantly, all cattle indicators had a lift in prices on the back of tighter supply. An increase in
Grainfed cattle bolstering supplies
With the export beef market again on the up, history tells us that our cattle prices should be following. Local supply is the issue, and
The cattle market bungee jump
In the last 6 months, the cattle market has acted like a bungee jump. Big supply on the way down and big demand on the
Feed pens fuller yet again
Volatile market conditions for cattle didn’t scare the lot feeding sector into submission last year with yet more growth recorded for the final quarter. The
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
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.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.