Weather whiplash creates erratic cattle market


Roads and paddocks have begun to dry out allowing the backlog of cattle from soaked areas of Queensland and New South Wales to hit the market. The influx of cattle outweighed demand at last week's price point, and most markets ended this week softer. However, the weather forecast hints that it might not be long before cattle movement grinds to a crawl in the north once again.

Figure 1 shows the disruption to cattle throughput caused by both weather and short selling weeks due to holidays. National cattle yardings have swung from just 22,016 a few weeks ago to preliminary MLA reports from this week showing 84,609 head yarded. The jump in numbers this week compared to last was 22%, which was clearly enough to let buyers sit back in their chairs.

All cattle indicators felt the weight of the uplift in supply this week. The Eastern Young Cattle Indicator  (EYCI) fell 30¢ over the week to settle at 596¢/kg which is 89¢ lower year-on-year. Feeder steer prices at saleyards lost 17¢ on the week and processor cow prices dropped a whopping 37¢/kg lwt. In the last week processor cow prices lost all of the gains made over the last three weeks. This is despite continued growth in US imported 90CL beef values, which last week sat just under 300 US¢/lb, which is back near the highs of early 2022 in USD terms.

What may have also spooked processors is lower prices for high-value cuts being reported in the US according to Steiner Consulting. The latest US inflation data was higher than expected, which is raising concerns about food service demand.

Slaughter rates remain elevated, with over 130 thousand head processed nationally last week. This is much stronger than the levels of the past three years but remains below the weekly April levels of 2018-2020. We know that labour remains a constraint for processing capacity, and if we are edging close to the capacity ceiling, the backlog of cattle to come through late Autumn may be testing.

Next week

The 10-day forecast is predicting heavy falls along the east coast, and up to 100ml in central to southern QLD. If this comes about we are likely to see more short-term supply tightness. With the ANZAC Day commemoration thrown in the mix, the market is likely to be “messy” in the weeks ahead, until a more stable balance can be found.

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Data sources: Mecardo

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