WITH rain on the horizon for northern Australia, the restocker buying frenzy that has swept young cattle prices to unfathomable levels is tipped to kick up a gear yet again.
Larger yardings as more spring cattle hit the market have not hampered the strength of the Eastern Young Cattle Indicator, which late last month hit a new peak of 1075 cents a kilogram carcase weight and hasn't dipped much since.
It is sitting today at 1061c, which is 232c above the year-ago level.
While feedlot buyers continue to increase the portion of EYCI-eligible cattle they are taking - yesterday their share was 56.94 per cent - restockers are still the driving force behind the upward price pressure.
Restockers paid an average 1179c/kg yesterday, compared to feedlots at 1029c and processors were back in the 900s.
Saleyard managers are reporting weekly throughput increases not seen since February and Meat & Livestock Australia market reports discuss cattle from far western Queensland entering southern Queensland yards, helping to bump up numbers and cater to the heightened demand from restockers and feedlots.
Online, the wet start to November had only added more heat to an already hot cattle market, AuctionsPlus analysts reported.
A healthy offering of 20,010 commercial cattle last week saw most categories improve in price, most notably for the three lightest steer lines.
Steers less than 200kg averaged $1,224/head while those 200-280kg averaged $1,701/head.
Downside
The fact heavy steer prices have gone with the EYCI for much of 2021 has been heralded the strongest show of strength in the ongoing prosperity of the beef industry.
Headwinds for finished cattle are now being flagged, however.
Rabobank's November Agribusiness Update says a stronger Australian dollar and softer global prices are expected to create dramas for that end of the market.
Rabobank senior analyst Angus Gidley-Baird's report said for the majority of 2021 Australia had been fortunate that global beef prices had been rising but that was now changing.
After rising 30pc between January and August, US imported lean trimmings have only increased 2pc since the start of August, the report said.
Likewise, Japanese, Korean and Chinese prices have been flat or weaker in recent months.
"These flat or declining prices will squeeze margins and create resistance to further Australian cattle price rises," Mr Gidley-Baird said.
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Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
