New South Wales and Queensland grids saw the largest week-on-week increases, with trade and heavy steers lifting nearly 30¢/kg across both states, while Victoria indicators saw marginal increases – albeit already trading at a premium to its northern counterparts.
For the week ending 15 May:
The heavy steer OTH indicator averaged 587¢/kg cwt, up 27¢/kg cwt week-on-week
The trade steer OTH indicator averaged 579¢/kg cwt, up 29¢/kg cwt week-on-week
The medium cow OTH indicator averaged 483¢/kg cwt, up 28¢/kg cwt week-on-week
In New South Wales:
The heavy steer OTH indicator averaged 563¢/kg cwt, up 25¢/kg cwt week-on-week
The trade steer OTH indicator averaged 553¢/kg cwt, up 25¢/kg cwt week-on-week
The medium cow OTH indicator averaged 486¢/kg cwt, up 22¢/kg cwt week-on-week
The heavy steer OTH indicator averaged 595¢/kg cwt, up 9¢/kg cwt week-on-week
The trade steer OTH indicator averaged 607¢/kg cwt, up 9¢/kg cwt week-on-week
The medium cow OTH indicator averaged 479¢/kg cwt, up 6¢/kg cwt week-on-week
Elevated finished cattle prices are largely a reflection of tightening availability in the domestic market.
Last week, eastern states’ cattle slaughter was reported at 126,000 head, 12% back on year ago levels. Another factor supporting current prices trends is the positive outlook for winter, which will further incentivise producers to hold back cattle.
However, the recent OTH uptick has also been influenced by production constraints in the US. Plant closures have left customers scrambling to secure product and driven wholesale beef prices to record levels.
Steiner Consulting Group estimates that fed cattle slaughter last week was down 38% while non-fed cattle slaughter was down 9%. Subsequently, demand for imported Australian red meat products have lifted, supporting an increase in domestic OTH grids.
This sharp decline in US beef production has also coincided with strong export demand from China. The void left by the US in Asian export markets could also generate increased demand for Australian imported products in the region.
At a domestic level, OTH increases have followed CV-19 cattle indicators higher this week, with the heavy steer indicator (CV-19) up 5% week-on-week to 330 c/kg lwt and the medium cow indicator (CV-19) up 2% week-on-week to 242 c/kg lwt. Yardings are well back on year ago levels, falling 36% to 38,000 head for the week ending 8 May.