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
Heavy cattle grabbing attention
The search for weight continues as buyers bid strongly for heavier cattle. With the supply agenda set by Meat & Livestock Australia last week, confidence
Is the herd turn enough to lift prices
The Meat and Livestock Australia (MLA) Cattle Projections released last week have confirmed the theory that we are seeing peak cattle herd now, and supply
Hot August sees supply build in September
The BOM declared August as the hottest on record, for Northern East Coast producers it created ideal fattening conditions and allowed unimpaired movement of stock.
Herd hits cyclical high
Meat and Livestock Australia’s latest industry projections have Australia’s beef cattle herd having reached its maturity, with numbers now back on the decline. This assumption
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.