THE plethora of understocked paddocks, particularly in NSW and southern Australia, combined with a ripper spring forecast is likely to hold cattle prices at strong levels at least until Christmas.
Hints the herd rebuild is now really starting to kick along are also there, in the form of less female cattle being killed in proportion to males and the red hot prices still being paid for replacement heifers.
The Eastern Young Cattle Indicator finished yesterday at 767 cents a kilogram carcase weight, up 7c on the same time last week and 295c on year-ago levels.
The finished end of the market is also notching up strong price trends. The Eastern States heavy steer indicator is sitting at 367.60c/kg live weight, 58c higher than year-ago levels.
Meat & Livestock Australia analysts report demand for grinding beef in domestic and global markets has seen competition between processors and restockers continue.
MLA's Stuart Bull said high demand in proportion to low supply was underpinning the strength of the young cattle market
"Competition to secure cattle is high with a range of buyers across the supply chain looking to attain their share among a small pool of cattle available," he said.
"This has been driven by the contrast in season between NSW and Queensland with reports of a lot of Queensland cattle crossing the border into NSW, holding up northern prices with the price gap narrowing between the two states."
Rabobank analyst Angus Gidley-Baird said it had now been seven months since the EYCI broke through the $7 barrier and it had lingered around the $7.50 mark for much of that time.
This represents the longest and most consistent peak in the market in the EYCI's history, he said.
No one can say how long the strength will stay in the market, and agents are even more hesitant than usual to take a punt on what is around the corner given the continual juggling act producers are performing between cash flow and the desire to rebuild.
Mr Bull said considering the current strength of the market, continued low supply expected and a positive weather forecast on the horizon for the remainder of the year, prices could remain at elevated levels until the results of the rebuild come to fruition and more cattle are available.
Tighter supply on AuctionsPlus last week supported a dearer price trend across most stock categories.
Holly Baker reported pregnancy-tested-in-calf heifers sold to a dearer trend with prices ranging from $1,375 to $2,350 to average $1,847, an increase of $70 on last week. PTIC cows increased by $49 to average $1,858. Southern Queensland offered the most cattle.
If the red hot heifer prices bring more females out of the woodwork for sale than anticipated, it could help fast-track the national herd rebuild as more calves would hit the ground to boost that supply pool, Mr Bull said.
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