EASTERN States' processors are buying up big in WA, adding further competition to livestock markets.
Tight supply and poor weather conditions over east has created extra competition in WA, according to Western Meat Packers CEO Andrew Fuda.
He said a number of cattle processors, in particular from Victoria, have been buying at local saleyards for the past few weeks.
"This is the first time, in recent times we have seen this," Mr Fuda said.
"We had processors come from the east a few years ago, due to the flood over there, but there hasn't been that competition for a while.
Mr Fuda said the recent droughts had contributed to a lack of supply and high prices in the east.
"It does affect us," he said.
"It is great for producers, but for processors it makes it tough.
"What will happen is, when the Eastern States' processors have the numbers they will leave and the prices will crash down."
Mr Fuda said processors in WA were now finding it tough.
He said the next few months had looked optimistic after two tough years, but the increased competition has made them re-think their operations.
"We were going to ramp-up an extra day from five days a week, but at this stage that doesn't look likely," he said.
"They are not only buying at the saleyards, they are also buying on-farm, especially from the Esperance region, because it is closer."
It is understood that more than 1500 cattle were purchased last week from the Muchea Livestock Centre, to be trucked to the Eastern States.
Mr Fuda said even with the extra freight costs and adding an extra 50c/kg to the WA cattle, the prices were on par with prices in the east.
"They are still doing better than if they purchased cattle locally," he said.
"For us ,it's a matter of lose them or pay the extra 50c/kg, so that just means more pressure for us."
The pressure was not only for processors, with Hyden lotfeeder and farmer Trevor Hinck saying WA was being underdone again.
"Even with freighting, processing and buying at high prices, they are still bringing product back into WA at a cheaper wholesale price than we can," he said.
"I don't know how that could be viable."
Elders said increasing competition at sales had been building.
At Muchea Livestock Centre last week bulls led the trend of higher prices with heavyweight and processor drafts close to 20c/kg dearer making 195-258c/kg.
Cattle purchased at the Muchea sales will leave Muchea on Tuesdays and are due to arrive in Victoria on Friday, for processing.
Elders auctioneer Don Morgan said at this week's Muchea cattle sale, there was a yarding of 3000 head, with over a third of those purchased by Eastern States buyers.
"It is great news for graziers and producers," Mr Morgan said.
"They are buying more manufacturing-type cattle, rather than breeding cattle, so it's great news for graziers.
"If things stay the same over east, those buyers could be here for longer."
Mr Morgan said it was positive news for the WA industry, with even more Eastern States activity at this week's Muchea cattle sale on Monday.
With a further increase of eastern buyers at the sale this week, Mr Morgan said prices had lifted again.
Meat and Livestock Australia (MLA) meat and livestock weekly cattle indicators for WA indicate in a year, WA's pastoral cow prices have risen from 177c/kg to 209c/kg, week ending October 6.
At Muchea on Monday, numbers lifted strongly in response to last week's higher prices, as well as warmer conditions in the north of the State.
Competition was much stronger with several Eastern States buyers keen to secure numbers against the local buyers including live exporters who responded aggressively.
Prices across all categories were higher with 20c to 30c/kg rises common.
The added competition comes as the Australian cattle supplies are at their lowest level in 20 years and likely to remain tight throughout 2017 before slowly increasing from 2018 onwards.
MLA's manager of market information Ben Thomas said Australia's severely depleted national cattle herd was the result of back-to-back years of record adult cattle turn-off in 2014 and 2015, exacerbated by recent widespread rainfall across some of Australia's largest cattle producing regions.
"Parts of western Queensland and New South Wales have experienced herd declines of up to 40 per cent in just three years," Mr Thomas said.
"The national herd has dropped from a peak of 29.3 million head in 2012-13, to 26.2 million head this year.
Mr Thomas said Eastern States adult cattle slaughter was destined to head from one unprecedented level to another in the space of just 18 months.
"During July 2015, the 52-week rolling average adult cattle slaughter peaked at an all-time high of 162,829 head," Mr Thomas said.
"This coincided with near-record live cattle exports and the consequence is Eastern States cattle slaughter will soon edge below 120,000 head for the first time since 2006.
"Expectations are for the rolling average slaughter to remain below 120,000 head for the majority of 2017 - an unprecedented low level for a longer duration than any other time in the past."
However, MLA expects the abrupt slowdown in cattle slaughter will result in more calves on the ground in 2017 and higher beef production in 2018.
