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
Prices out of sight but top of mind
Young cattle prices mustered up some more strength from another week of subdued supply to post yet another record. And what a record it was!
We can see the downside, but timing uncertain
New records are being set for young cattle, while slaughter cattle are back close to the highs set last year. The most common question being
Stronger, higher, the moon?
The 2021 cattle markets have opened at a relaxed pace in terms of volume; however, prices have risen energetically, with the EYCI well and truly
EU premiums in weaners- fact or fiction?
The question of premiums in agricultural commodities is often up for discussion, and the recent weaner calf sales provides the opportunity to examine the existence
Don’t have an account with us? Join free.
You can have full premium access to all of our content with a monthly or annual subscription.
Alternatively, create a free account to access our Insights blog and two free premium article a month!
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.