Winter respite before a dry spring?


Winter historically has been a period of reduced supply which has often led to a marginal rise in cattle price indicators at this time of year. Despite the heightened supply pressure, we did see some indicators bounce back on average over July but as we approach spring, the recent resilience of price indicators will begin to be tested.

The Eastern Young Cattle Indicator (EYCI) sits at 558 ¢/kg cwt down 6¢. The Western Young Cattle Indicator (WYCI) saw a 43¢ rise this week to sit at 546 ¢/kg cwt, as young cattle throughput out west is going through a seasonal lull as is expected this time of year.

Finished cattle had a relatively good week as the National heavy steer indicator improved 6¢ this week to 284 ¢/kg/lwt. Specifically in NSW heavy steers were up 3¢ to 279 ¢/kg/lwt; Queensland saw a jump of 6¢ to 278 ¢/kg/lwt and Victorian heavy steers flirted with the 300¢ price mark, improving this week to 296 ¢/kg/lwt, a rise of 4¢.

Feeder Steers in NSW and Queensland went in different directions this week, with NSW improving 3¢ to 326 ¢/kg/lwt and Queensland feeders with a 5¢ decline to 318 ¢/kg/lwt.  Feeder steers have gone through a number of ups and downs in Winter as buyers move through the motions of margin adjustments for a drier outlook. To summarize feeder steer price movement in Winter thus far, the national indicator has improved by 1.5% from the beginning of June to the first Friday of August.

Feeder cattle could continue to be a watch heading into spring. Indonesia has paused live cattle exports from four Australian facilities pending further testing of animals for Lumpy Skin Disease (LSD).  As confirmed by the Australian Government and Australia’s Chief Veterinary Officer, Australia remains free from LSD and we have never had a positive detection on our shores and live cattle exports to Indonesia are continuing with 28 registered establishments still available for use by exporters wishing to trade.  Domestic pricing looks to not be immediately impacted this week by the suspension. As reported by Argus, northern cattle mustering is underway; depending on feed availability and the live export situation, feeder-style cattle could make their way to domestic markets which would potentially add additional supply pressure for feeder markets.

Based on preliminary reports, East Coast yardings this week have increased 17% week on week to 47.5K which is a 72% change on the same time last year. Meanwhile, Slaughter on the East Coast last week increased 1% week on week, and was 19% higher than the same time last year.  That East Coast slaughter figure is still 1% lower than the 5-year average for the same sale week of the year which is indicative of the cattle slaughter situation at the moment.  Plenty of cattle moving through to processors but the high tide mark of slaughter hasn’t yet been reached with regularity this season.

Next week

A 2.1% increase in the 90CL price last week is a welcome sign, as the US cattle market continues to present an export opportunity for Australian beef. 

Export markets will be a key player in the absorption of supply heading to spring as the BOM forecasts below-median rainfall in the next few months at a pivotal moment in the season. Feed availability will be a key factor in stock turn-off decision-making.

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Data sources: MLA, Argus, Steiner, DAFF, Mecardo

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