Young cattle market treads water

Young cattle market treads water

Beef
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Victorian slaughter dips by 20pc with processor closures.

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YOUNG cattle prices continue to hold up against a backdrop of unprecedented upheaval in the beef game delivered by a global health crisis.

Supply has shown stronger signs in the past week of drying up, although agents across the country have for some time now pointed to zig zagging vendor sentiment on whether to hold or sell.

Producers are pulled one way by the desire to take advantage of a current strong market and boost cash flow and pulled the other by the need to rebuild and the prospect of adding more weight courtesy of a good season and perhaps marketing when some of the uncertainty has settled and prices are even stronger.

The Eastern Young Cattle Indicator finished yesterday at 750 cents a kilogram carcase weight, back 5c on a week ago, which itself was a slight decline on the prior week. Still, it is 220c above year-ago levels and at an historically strong level.

Processing plant closures due to coronavirus outbreaks, or as a precaution against one, in Victoria over the past fortnight appear to be having only localised and short-term affects on cattle markets. More broadly, the tight supply situation remains firmly on the producer's side.

Victoria's slaughter figures, did however, take a 20 per cent hit last week with JBS Brooklyn, the state's biggest abattoir, out of action. That compared to Queensland's 2pc decline and NSW's 3pc.

Analysts say supply should continue to tighten through the rest of winter and Meat & Livestock Australia is forecasting slaughter to be down by 6.9 million head in total for 2020, which means further processing scalebacks are on the cards.

MLA reported total yardings across the eastern states for the first five weeks of winter were down 10pc year-on-year. Saleyard throughput declined considerably in NSW, back 45pc, which somewhat offset a 19pc lift in yardings in Queensland.

Yardings in Victoria also increased 17pc and it will be interesting to see if that continues amid downward pressure on finished prices, with processors affected by virus outbreaks and border closures.

Agents here, however, continue to ascertain that the strong demand from grassed up regions is having the dominant effect and vendors are keen to take advantage.

Anthony Mahony, livestock manager at Brian O'Halloran, Warrnambool, said store sale numbers for next week have not come off.

Remote buying was being gradually embraced, which was offsetting some of the lockdown challenges, and the thinking was the local plant closure would likely be short-term, he said.

"There's no panic - it's traditionally our quiet time of year anyway - but there is concern," he said.

"It is not, however, holding back the market or the stock at this point.

"Demand is excellent for store stock - it's still coming from many areas in Victoria, from South Australia and from NSW."

Yardings at store sales in the past few days ranged from a reduction of 159 head at Toowoomba yesterday to 910 at Dubbo on Friday.

On AuctionsPlus, numbers were down for the second week running, back 5800 odd head on the previous week.

Hugh Courts reported the reduced numbers saw fierce competition, particularly in breeding categories, with cows with calves at foot up $268.

Whilst it was raining across most of south east Australia, cattle numbers have clearly started drying up, he said.

Southern Queensland edged out Central Western NSW to be the biggest purchasing region, securing 1,157 and 965 head respectively.

ALSO READ: No panic stations as more Victorian meatworks shut down.

The story Young cattle market treads water first appeared on Farm Online.

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