Cattle prices will remain favourable, supported by the seasonal forecast and growing export demand, according to Meat and Livestock Australia's latest Cattle Industry Projections.
Australia is in the midst of a national herd rebuild, resulting in less cattle, especially grassfed cattle, being sent to slaughter.
At the same time, the MLA report said grainfed cattle have made up 47 per cent of slaughter and 51pc of domestic consumption this year.
MLA report fewer females in the grassfed kill have supported the balance shifting towards grainfed.
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"Higher proportional feedlot activity has helped to ensure more consistent supply to processors in a low supply environment," MLA reported.
"Until more grassfed cattle hit the market, the dynamic isn't likely to shift significantly, especially if positive seasonal conditions persist.
"While this is the case, feedlots will maintain strong demand for cattle, especially if international demand is stronger than supply can cater for and input costs are lower due to stronger cropping yields across key production areas."
Young cattle values contributing to the Eastern Young Cattle Indicator came off the boil in the latter part of last week (having hit a record 1003.62c/kg (cwt) on Monday last week) and are now hovering about 990c/kg.
A breakdown of buyer weights within the EYCI calculation at the end of July highlights an upward trend in the weight gap between what feeders and restockers are purchasing at the saleyard.
"The margin has grown 60kg in 10 years, currently sitting at 103kg, highlighting producers maximising weight to cater to the feeder market as lotfed programs grow," the MLA report said.
Feeders have closely mirrored the weight buying pattern to restockers this year, showcasing the alignment of buying behaviour as they compete to sure up supply and maximise margins as they become tighter down the supply chain.
"Traditionally, the difference remains similar, however, the long-term trend does present a broadening gap in the past 10 years," MLA report.
"This points to the prevalence of store cattle at the saleyard versus those finished, and the growth of the backgrounding operations helping to push out weight gain."
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