Young cattle prices on the rise again, thanks to La Nina

Shan Goodwin
By Shan Goodwin
May 10 2022 - 3:00am
Rain turns cattle price decline around

RENEWED restocker enthusiasm on the back of widespread rain across key cattle-producing areas has halted the downward slide of young cattle prices.

The Eastern Young Cattle Indicator did an immediate u-turn and lifted back above the $11 mark for a period last week.

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Analysts and agents feel it will likely zig-zag around that mark for at least the next month, given the widespread better-than-usual start to winter.

The flow of lighter, young cattle onto the market in the north eased immediately with the rain across large parts of central Queensland.

Rabobank senior analyst Angus Gidley-Baird said although it was not necessarily season-breaking, the rain may just allow some pasture growth going into winter which will encourage producers to hold, or possibly even pick up, additional cattle.

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Restocker demand for the weaners coming onto the market in Queensland should be good given the latest rain and plenty of solid grazing crops, particularly oats, around, agents said.

Past the next month, however, the young cattle market's easing trend is likely to resume, especially if the rain finishes up.

Most national cattle price indicators have gone up on the rain, with medium steers the most notable. It has jumped more than 40 cents a kilogram carcase weight in the past week and is up more than 80c on the year-ago level, which itself was already historically very high.

Mecardo's Adrian Ladaniwskyi said medium steer prices have clawed back all the ground lost since early March in one hit.

The big surge looks to be a result of southern influence, with high prices in Shepparton, Victoria and in South Australia pushing it up, he reported.

Heavy steer prices are the exception to the upward movement, dropping off to a small degree. Tough trading conditions for processors continue, and slaughter levels remain well below the five-year average. While export prices are strong, and the United States liquidation is keeping imported Australian lean trimming prices in high territory, the shortage and cost of cattle on home soil is keeping processor margins firmly in the red.

Meat & Livestock Australia analysts said labour remained the largest challenge faced by the livestock industry.

Interest rate increases would put pressure on already-high fuel and fertiliser costs but those make up only a low proportion of production costs, they said.

The heavy feeder steer market is expected to continue to track sideways for the next couple of weeks until space is created in feedlots for new cattle,Tim Jude, livestock and commodities broker with StoneX Financial, reported.

Feedlots were keeping a close eye on the increasing grain price, which has implications for margins, he said.

The Australian northern cattle feeder price indicator remains firm.

Mr Jude reported in-specification heavy feeder steers prices were improving but those that were either too heavy or too high in tropical breed content were encountering a hefty discount.

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Shan Goodwin

Shan Goodwin

National Agriculture Writer - Beef

Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally.

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