Is hot restocker demand here to stay?

Market Murmurs | Is hot restocker demand here to stay?

Beef
Ben Goodman, Ian Morgan Livestock, Tamworth, with Cam McKellar, Levendel, Willow Tree, sold Limousin vealer heifers for 700c/kg ($1207/head) at the Tamworth prime cattle sale on Monday. Photo: Michelle Mawhinney

Ben Goodman, Ian Morgan Livestock, Tamworth, with Cam McKellar, Levendel, Willow Tree, sold Limousin vealer heifers for 700c/kg ($1207/head) at the Tamworth prime cattle sale on Monday. Photo: Michelle Mawhinney

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Have we reached the price peak in the market?

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RESTOCKERS remain the bidders to beat at the buyers' rail in the saleyards and on the various online purchasing platforms.

Their competition has helped keep the Eastern Young Cattle Indicator above 875 cents a kilogram (carcase weight) this week.

Even light young cattle, which require a considerable amount of time in the paddock before they are even near feedlot entry weights, let alone the prime slaughter market, have been in hot demand.

Vealer steers and heifers were the highlight during the Tamworth prime sale on Monday. One pen of heifers from Willow Tree hit 700c/kg (liveweight) and returned $1207 a head. Another heavier pen of vealer steers from a property near Wallabadah made 650c/kg or $1806.

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And it looks like these prices may hang around for a while longer when taking into consideration the recently released extensive report from Meat and Livestock Australia detailing the organisation's industry projections for 2021.

COVID-19 significantly affected supply chains and economies throughout 2020, MLA reported.

"For the Australian beef industry, the biggest impact of COVID-19 has been the fall in foodservice demand for beef, both domestically and internationally, due to restrictions and social distancing laws," the report said.

However, the upside was that retail sales of beef increased as consumers turned to home cooking.

Despite COVID-19 disruptions, MLA's report said there was evidence the domestic beef market remained solid in 2020, with Australia remaining one of the largest per capita consumers of beef in the world and the domestic market continuing to be the single largest buyer of Australian beef.

As we lurch further into 2021, MLA suggests maintaining per capita beef consumption will be a challenge as forecast supply constraints in the coming years place more pressure on beef prices and exacerbate the expanding price differential to chicken and pork.

However, its report said there were still plenty of opportunities for sales growth, particularly when focusing on rising consumer demand for better quality, more nutritious, versatile and convenient food offerings.

With a national cattle herd estimated at 24.6 million head as at June 30, 2020 (the lowest level since the early 1990s) and no solid signs of herd rebuilding (female slaughter figures still too high), it will be an interesting time to be buying and selling cattle week-to-week.

Have we reached the price peak in the market? I'm not sure, but after years of watching and writing about cattle market trends, I do know there's always another surprise or shift just around the corner that nobody could have predicted.

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