Record prices as buyers battle for cattle

Record prices as buyers battle for cattle


Beef
Scott and Julie Reid, "Bindiwalla", Forbes, sold seven grainfed Hereford heifers for 314 cents a kilogram at Forbes prime sale on Monday.

Scott and Julie Reid, "Bindiwalla", Forbes, sold seven grainfed Hereford heifers for 314 cents a kilogram at Forbes prime sale on Monday.

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By Wednesday evening the Eastern Young Cattle Indicator (EYCI) had surged to a record 640.75 cents a kilogram (carcase weight) as buyers bid up another storm in an attempt to fill orders.

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A SURGE in the prime cattle market of about 20 cents a kilogram (liveweight) early this week was a bonus for vendors who were already celebrating another fall of rain during the weekend. 

By Wednesday evening the Eastern Young Cattle Indicator (EYCI) had surged to a record 640.75 cents a kilogram (carcase weight) as buyers bid up another storm in an attempt to fill orders.

Sales of both yearling steers and heifers on Wednesday were on average 30c/kg dearer forcing the overall EYCI up more than 6c/kg in one day.

At the same time the EYCI was more than 70c/kg higher than a month ago and over 130c/kg more than a year ago.

Scott and Julie Reid, “Bindiwalla”, Forbes, took advantage of the rising winter market selling 532kg grain finished heifers for $1670 at Forbes prime sale on Monday. 

“The prices were unreal,” Mr Reid said. 

“We try to have our stock in prime condition for this time of year to take advantage of the traditional dearer winter market.”

Mr Reid said his heifers were grain fed as there was little feed in the paddocks during autumn. 

“The grain feeding has paid off this year and with all the rain about and tighter supply, I expect the market to rise a little more in coming weeks.”  

But there could be even more joy for vendors who have well finished stock to sell with Mecardo analyst Matt Dalgleish predicting an EYCI high of 650c/kg.  

“Our modelling suggests the expected range in 2016 is 545c/kg to 650c/kg and 580c/kg to 675c/kg in 2017.”

The Mecardo forecast model for the EYCI incorporates supply projections from Meat and Livestock Australia along with forecast variables from the US Department of Agriculture, Australian dollar estimates, 90CL prices and live cattle futures prices.

It appears the price surge last week and again this week had little to do with falling supply at saleyards as most centres have recorded an increase or steady yardings. 

Mecardo analyst Angus Brown said cattle yardings in National Livestock Reporting Service saleyards were up nine per cent last week, and this was despite it being a short week with no Monday sales in NSW or Victoria.  

“Rising prices seem to have drawn more cattle into the saleyards, but obviously supply is well down on the five year average,” he said.

Nonetheless, Mr Brown said cattle prices were likely to be expensive until September or October, when there would be well finished cattle thanks to the abundance of feed.

But, paddock to plate beef producer Robert Gill, “Alexander Downs”, Merriwa, said the cattle prices had hit dangerous territory this week.

“We have to remember somebody has to buy the meat and somebody has to plate the meat,”  Mr Gill said.

“We have to keep it in reach of the consumer.

“Bearing in mind beef was miles too cheap for many years, but this latest rise I think is too dear.”

He said it may be good for some people within the beef industry, but it has to be sustainable.

“At the end of the day if we can all have a piece of the pie, it lasts longer,” he said.

“But if somebody gets too much there is going to be a reaction when the chance comes and that chance will come in late September this year - there will be an over correction then.

Mr Gill said there was the potential for some people to lose money on these dear cattle if they buy them now to finish.

“There is nothing more dangerous than a grazier with feed,” he said.

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