As supply dwindles, processors are still looking to secure cattle through winter, with all over-the-hook (OTH) indicators in NSW, Queensland and Victoria lifting on year ago levels.
National CV-19 indicators continue to rally as domestic supply shortages develop and processor competition ramps up, with winter supplies set to tighten.
The cow market has performed well due to strong restocker competition. However, demand from processors in recent weeks looking to support demand from US end users due to reduced processing capacity creating supply chain challenges, has helped pushed prices higher.
Domestic steer price trends
National saleyard throughput averaged 49,700 head last week, back 22% on year-ago levels, as improved conditions and the increase in feed supports the transition from herd contraction into a rebuilding phase.
Much of the decline was from NSW which saw yardings drop 57% year-on-year to 12,676 head. Finished prices continue to rally on the back on fewer numbers, with the national medium steer and national heavy steer (CV-19) indicators up 27c/kg lwt to 335c/kg lwt and up 17c/kg to 354c/kg lwt, respectively. Young cattle prices also trended higher, with the national yearling indicator (CV-19) rising sharply by 48c/kg lwt on week ago levels to 399c/kg lwt.
As supply dwindles, processors are still looking to secure cattle through winter, with all over-the-hook (OTH) indicators in NSW, Queensland and Victoria lifting on year ago levels.
Overseas demand remains strong despite lingering uncertainty. Across the southern states, processors continue to lift grids and have turned to northern regions to secure cattle. Subsequently, southern grids have gained ground on northern grids across several categories.
Australian prices find support in the US manufactured beef market
The availability of breeding stock this year was always set to be tight, and on the back of the improvement in conditions, prices responded to reflect the surge in demand. Last week, the national medium cow indicator lifted 4% week-on-week to 259c/kg lwt – the highest since March. Restocker demand continues to underpin the price support. However, US demand for lean grinding beef in recent weeks has pushed prices higher.
The US continues to be impacted by supply constraints, as processing plants operate at reduced capacity due to COVID-19 related restrictions.
Steiner Consulting Group reported a 14% decline in US cattle slaughter on year-ago levels and a 5% drop in cattle placements. However, local supply constraints have supported Australian prices, with the imported 90CL indicator moving to the highest level so far this year at 809.8c/kg cwt.
Looking ahead, cattle that were not placed into feedlots or sent directly to processing plants will contribute to an oversupply of finished cattle.
Carcase weights will likely rise, with Steiner consulting group estimating a 5% increase in these on year ago levels. Despite an influx of finished cattle readily available when the US supply chain returns to normal operations, lean trim for ground beef demand is expected to hold strong.
https://www.mla.com.au/prices-markets/market-news/cattle-prices-sustain-upwards-trend/#