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Australian Cattle & Beef Market Report

By: Ripley Atkinson, Ripley Atkinson

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Feeder prices to 2022 levels as shifting slaughter dynamics are cause for attention

Key Points

  • It’s likely that this shortness of supply in the broader southern regions will run for 6 weeks or so more – before early crop cattle begin to move.
  • Grass fever, particularly in QLD is continuing to drive this rally in restocker prices – producers clearly don’t want to miss out.
  • A system due at the end of July is the next one to watch and how this then translates to shifting supply will be a key one to watch.

Supply

  • QLD volumes starting to build now that the end of the financial year is behind us – the next weather system at the end of July is the one to watch for what it does to marketings..
  • There’s probably another 6 weeks to run on this short supply being felt throughout what you’d call the south (including northern NSW) before numbers begin to build into the peak of Spring selling.
  • Cattle slaughter last week based on NLRS numbers hit its lowest level since the Easter break – with big declines seen particularly in QLD & NSW.
    • Importantly, there were some major disruptions for QLD plants last week due to break downs and other issues, which has weighed on this outcome – coupled with another QLD plant who has ceased providing weekly slaughter numbers to the NLRS.
    • For the market, I would still take note of this easing in volumes – particularly if it persists.

Demand

  • As above, slaughter interest is waning, evidence by the reduction in kill numbers – the question becomes, is this a short term issue related to EOFY & cattle accessibility, or is a structural easing in demand due to bigger concerns?
  • Processor demand for slaughter cattle is certainly easing – ample supply is playing a role but I do think a lot of it has to do with this pressure felt in the US market on trim.
  • Last week I said now is the peak demand for Angus feeder cattle – I am probably out a little bit on that comment – lets call the next month is peak demand – which also aligns closely with the shortest period of supply…

Price

  • QLD Crossbred feeder prices are now at the 99th percentile on record – market continues to lift – with prices now at their highest levels since March 2022 based on Argus Media reporting.
  • Grass fever continues to firm – with rates on light cattle particularly in QLD performing very strongly this week – online tomorrow should yield similar results.
  • I thought the market might have found its match in the past 10 days or so and reached its peak in this cycle, but the underlying demand from all parties (restockers & feeders particularly) has kept it moving higher.
    • Conversations with a few this week suggest surprise more than anything that it can continue to lift on where it is already – which for feeder categories is nudging record levels.
  • Slaughter cattle feeling pressure – with discussions from the meat end of the market expressing dissatisfaction with how prices are performing in that space and the pressure rates are feeling for boxed product.

Weather

  • The next major weather system due at the end of this month for central eastern Australia (potentially stretching into CQ) will be the key focus of rainfall this month
    • I suspect we may see another shortening in numbers and a stabilization to rise in rates because of it – accessibility I would think will also become an issue.
  • Generally dry for the country over the next week or so – cold weather imposing itself across the nation – with anomalies showing its been 2-4 degree’s cooler in NSW / VIC / SA this week than usual for minimum temperatures.

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