THE WA cattle market has seen a drop both in prices and numbers yarded for more than four weeks, with things expected to remain the same in the short-term.
Elders Muchea market reached its year high on March 30 this year when vealer steers averaged 417 cents per kilogram ranging from 340-432c/kg.
Last week Elders reported the declining price trend to a low of 280c/kg for vealer beef steers, 250c/kg for yearling beef steers and a further decrease to 165c/kg for cows.
Those prices are way down on this time last year when prices were at 350c/kg for vealers, 320c/kg for yearling beef steers and 255c/kg for cows.
Despite the slide in prices and the lack of numbers at the markets, there is a sense of optimism among livestock agents that things are just playing out as expected.
Landmark national livestock manager Leon Giglia said the WA cattle market correction came in July as expected.
“The market has eased as anticipated but the it will settle and find its place,” Mr Giglia said.
“The seasonal conditions are impacting the market at this point.
“I believe we will return to 2016 figures once we get the spring flush out of the way – which is not a long period of time.
“There is no expectation it will rise to the height of early 2017.”
Mr Giglia said producers were looking for consistency in the market, and while the trend was a drop off in numbers around this time of the year, there was an expectation for it to improve after the spring flush.
Elders State livestock manager Geoff Shipp said prices were still good for cattle in WA, despite the downward slide, and expected the market to “hold where it is” before picking up again.
“I’d be surprised if it got up to the past highs,” Mr Shipp said.
He said processors and exporters had found it difficult to continue the pricing of last year, which had shown in the prices coming back in recent livestock sales.
“We have definitely seen a shortage in numbers generally,” Mr Shipp said.
“However, on Monday we saw quite good prices for cows at Muchea.”
Mr Shipp said a lot of people in the pastoral country sold off their stock last year, to capitalise on the high prices and in the southern areas there was a move for the British breeds herd to rebuild – with farmers holding on to stock.
“We have had feedback that there is a move for rebuilding but it is not on a huge scale,” he said.
“There is not a lot of feed around and the season has really affected things this year.”
Mr Shipp said other factors that were impacting on the WA cattle industry were the strong Australian dollar, the “week-to-week” change in the South East Asian market, as well as the Eastern States market.
Primaries live export cattle manager Bibra Lake Simon Green said after the sale in Muchea this week the WA market looked “a bit stronger”.
“We are affected by the Eastern States – if they go up, we’ll go up,” Mr Green said.
“Cattle prices have lifted about 20c/kg in the past 10 days in the East.
“A bit of rain around is also going to help.”
The price direction of Australia’s cattle market and national herd rebuild now hinges on a solid seasonal break, following a dry finish to winter and hot September across much of Australia.
Meat and Livestock Australia’s (MLA) October cattle industry update maintained July slaughter forecasts, with some upward revisions to projected beef production and export volumes as a result of higher carcase weights.
MLA market intelligence manager Scott Tolmie said the main impact of the poor season had been the downward trajectory of Australian cattle prices, largely caused by reduced restocker demand.
“However, rain across southern Queensland and northern New South Wales in early October has revived the market, with reduced yardings and stronger restocker buyer activity lifting prices,” Mr Tolmie said.
“If the positive rainfall outlook for eastern Australia in October comes to fruition, it will go a long way to supporting young cattle prices.
“Indeed, the recent rain across key cattle producing areas saw the Eastern Young Cattle Indicator (EYCI) kick, regaining 25c/kg carcase weight (cwt) or 5pc over the first week of October – a clear indication of the likely larger response if a more complete seasonal break arrives.
“Feedlot demand has also supported the EYCI, driven in part by robust export demand for high quality grainfed product in Japan and Korea, especially over the past few months.
“With the herd rebuilding cycle still underway, the availability of lightweight stock through markets remains limited, which should see prices continue to track above the five-year average for the remainder of the year.”
Mr Tolmie said the dry was yet to jeopardise the national herd rebuilding, with adult cattle slaughter remaining on track with the July update forecast of 7.25 million head.
“Based on the more positive rainfall outlook for the rest of 2017, producers are not expected to further accelerate their current turn off at this stage,” Mr Tolmie said.
“However, further dry weather could derail the broad industry rebuild that is underway and challenge many producers with some tough decisions.”
Record numbers of cattle on feed and a relatively low proportion of females making up cattle slaughter has resulted in an upwards revision to average carcase weights.
“Australian adult cattle carcase weights have held up well in 2017 – the national average hit a record monthly high in April of 299.2kg, and has averaged a record 296.5kg for the year to August – 10kg or 4pc higher than the corresponding period last year,” Mr Tolmie said.
“As a result, the 2017 forecast for the national average adult cattle carcase weight has been revised higher than what was projected in the July update, to a record 297.4kg.
“This represents a 3pc, or 9.2kg, increase from the record reached in 2016.
“Higher average carcase weights have prompted a slight increase in projected beef and veal production, from an estimated 2.17 million tonnes cwt in the July update, to 2.18mt cwt – a 3pc year-on-year increase.”
The rise in Australian beef production has seen exports also revised slightly up from 1.02mt shipped weight (swt) to 1.03mt swt for 2017.
