cattle_016

The Eastern Young Cattle Indicator jumped 7 cents to 686c/kg cwt this week, following a 6% week on week increase in yardings. Restockers and feeders were well placed to acquire cattle in numbers at the nations saleyards in what was a largely sideways week for pricing.

Restocker demand was alive and well as the number of heifers and steers heading back to the paddock increased 72% and 49% respectively week on week. In Queensland’s main saleyards, there was strong buyer turnout but restockers, in particular, chose to be more selective, resulting in the Restocker Yearling Heifer Index losing 8¢ to 290¢/kg lwt and the Restocker Yearling Steer Index dropping 10¢ to 365¢/kg lwt.

With feed crop pricing globally pushing lower under supply pressure, feedlotters are in a good place currently to acquire cattle and this was evident in the numbers heading to feedlots this week.  A 57% increase in numbers sold to feeders indicates confidence in the outlook, and they don’t need to stretch the budget too far currently as the National Feeder Steer Indicator lost 9¢ to 368¢/kg lwt. 

Processor cows finished 3¢ higher to 29 ¢/kg lwt after a 10% increase in yardings week on week. Last week’s Steiner US beef report (read more here) saw 90cl pricing average slightly higher to 289¢/lb.  Simultaneously the Australian dollar has creeped upward against the US which has eroded some of the gains.  For the most part this year the exchange rate has been very supportive of Australian export demand. A significant change in the economic outlook would be required to put a dent in current export beef pricing, however, inventory management and reactive buying and selling will start to play a role when the exchange rate fluctuates.

This week on Mecardo, Angus Brown discussed the level of slaughter pushing the herd into decline (read more here).  June quarterly cattle slaughter shows that processing cattle has reached its strongest level since 2019 and that Female cattle slaughter as a proportion of total slaughter jumped significantly. 

Next week

With the direction of the cattle herd looking to be in decline but seasonal conditions for major cattle areas looking upbeat and US export demand likely to remain at least sideways, the platform looks to be built for opportunity in the cattle market.

Next week’s MLA herd projection will provide a refresh on the size of the herd. If it’s lower than we expect could this push saleyard pricing higher?

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Click on graph to expand

Click on graph to expand

Data sources: MLA, Steiner Consulting group, Mecardo

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