Yardings collapse continues, processor steers benefit.

Hereford cattle in green paddock

Young cattle prices have been supported by low slaughter numbers and declining yardings for a few weeks now, and this week was no exception. Processor and heavy steers prices saw encouraging gains, however, restocker and feeder prices slumped.

Yardings dropped again last week, down 17%, with the reduction led by QLD, which fell by 22%, followed by VIC booking a 27% tumble. Seasonally speaking, this is unusual, as yardings typically lift this time of year. A total of 39,318 head were yarded on the east coast for the week ending 19th February 2021, which was 7,994 less than the prior week. 

Slaughter crept upward 2% week on week, however, VIC kills slid 12%, offset by a 9% increase in NSW, however, kill rates are still 25% down compared to the same time last year, and the 5-year average. For the week ending 19th February 2021, 99,470 head were slaughtered, which was up 2,286 head from the prior week.

The EYCI gently eased downward again losing 4¢ (<1%) this week to settle at 862¢/kg cwt.

The national categories showed some bright spots this week, with processor, medium and heavy steers all travelling upwards. Vealers reached another solid high, now edging quickly towards being $1 (25%) higher than the low set back in mid-December. In contrast, restockers and feeders downshifted against the trend.

This week, vealers lifted 12¢ (3%) to reach 492¢/kg lwt; since the end of January, they have climbed over 40¢ (9%) and 86¢ (21%) higher than the low point seen in December last year. Processor, heavy and medium steers all climbed higher, respectively adding 11¢ (2%), 7¢ (2%) and 3¢ (1%) to end the week at 447¢/kg lwt, 373¢/kg lwt and 402¢/kg lwt accordingly.

On the other side of the coin, feeder and restocker steers drifted backwards, with feeders losing 11¢ (3%) to finish at 446¢/kg lwt and restockers reversing 7¢ (1%) to close at 518¢/kg lwt. Medium cows joined the descent, dropping 7¢ (2%) to settle at 287¢/kg lwt.

The Aussie dollar was stagnant as a pond in a sheltered field, holding ground to remain at 0.787US.

The 90CL fell back another 13¢ (2%) last week, off the back of jitters in the US about transport reliability during extreme cold weather from the polar vortex effect that has had cattle ranchers in some states resort to desperate measures like bringing new calves into their own homes to protect them from the weather.

The week ahead….

A considerably lighter sprinkling of rain is due for the coming week, with VIC and southern NSW looking to basically miss out, while further north, most areas are set for only 5-10mm. Like we said last week, yardings typically rise this time of year; but the downward trend recently doesn’t look positive for history to be a good predictor at the moment. Slaughter is still down considerably, with supply tight, so again, the fundamentals are there that support for prices should remain next week.

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Data sources: MLA, Mecardo, BOM

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