![Prices across most categories of cattle have taken a tumble in the past week. Prices across most categories of cattle have taken a tumble in the past week.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/ef923365-c8a7-4a4e-baa0-9b50d15b6a05.jpg/r0_95_4256_2611_w1200_h678_fmax.jpg)
Cattle prices have taken a fall on the back of heavier supply but the market is far from keeling over and many people, particularly backgrounders, are saying the new level is far more sustainable.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
Agents say traders who have been quiet since the market started to jump after Christmas are now coming back to the rails, which will underpin demand going forward.
The fact prices have only eased in the vicinity of 10 per cent for most indicators is a seen as a sign there is still faith in the season ahead and that the market is not about to fall off a cliff.
In Queensland, the word is feedlots and processors have bought far bigger numbers out of the paddock in the past week, which has taken a bit of demand at the saleyards away.
In Victoria, it's local demand falling off due to the season turning dry that has combined with the heavier volumes to push prices down.
Victorian agent Bruce Redparth, Elders Mortlake, said the western district was now experiencing a far different season to what it had been 'spoilt with' in the past few years.
"Almost overnight, feed has gone right off and local competition is now non-existent," he said.
"At the same time, we have record numbers coming through. The fact we still have Queensland and northern NSW feedlots here buying has kept the drop in check."
That story of a change in season, and most categories being back 15 to 20 cents a kilogram, appears true for most of Victoria apart from South Gippsland and also for the south-eastern parts of South Australia.
Episode 3 data shows average weekly cattle yardings across eastern seaboard saleyards so far for February has sat at around 73,000 head which is 82pc higher than for the same period last year and 78pc stronger than the five-year average.
Quick to react
"It's certainly not atypical for the market to drop once bigger numbers of cattle flow through but there is a bit of an element of quicker reaction these days," Northern NSW agent Bruce Birch, Birch Rural at Tenterfield, said.
He suggested that could be the result of both what was experienced in the last drought and an understanding of the headwinds on the meat job such as big stockpiles of beef in overseas markets, labour issues in processing plants and disputes at ports.
"What I will say is most people are quite happy with the level the market is at right now," Mr Birch said.
"Margins are still good and people just don't want those extreme peaks and troughs."
Stone X analyst Ripley Atkinson said the latest drop was an example of "how emotionally-driven the cattle market can be."
"Fundamentally nothing has changed between this week and last week, other than more stock sourced directly from the paddock in Queensland has reduced some demand on saleyard cattle," he said.
"It's not as if a drought has just been declared or an exotic disease outbreak is here."
If producers reacted to increased numbers continuing to flow by looking to sell "before cheaper prices the following week" it would exacerbate volatility, Mr Atkinson said.
That dynamic was weighing increasingly more on markets, he said.