Rain has a dramatic impact on cattle prices

Rain having a dramatic impact on cattle prices


Analysis
FIGURE 1: East coast cattle slaughter. The year so far has seen slaughter tracking the five year average, but there is a chance it could drop back to 2017 levels.

FIGURE 1: East coast cattle slaughter. The year so far has seen slaughter tracking the five year average, but there is a chance it could drop back to 2017 levels.

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The Stock Take: Mecardo's Angus Brown writes about the impact recent rain has had on the market.

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Heavy falls have occurred across major cattle areas in Queensland, but not everywhere.

For much of Queensland and parts of NSW, the rainfall figures for March were above average.

If we take January and February into account northern Queensland looks good, though at the same time, it does highlight just how far behind normal south-east Queensland is.

A lot has changed in the national herd since Meat and Livestock Australia produced their last cattle distribution map, however, the rankings shouldn't have shifted.

The biggest cattle region, the Fitzroy Basin, had above average rainfall in March.

The third largest region, the Desert Channels, also got wet.

Add to this the northern Queensland zones, which are recovering from flooding and a couple of smaller areas in NSW, and there should soon be feed in front of 40 per cent of the national herd.

A lot of the cattle that have benefited are Bos Indicus types, but considering destocking has been so strong, even rain in the far north is going to tighten supply and increase demand down the east coast.

The rain has had a small impact on recent cattle slaughter levels.

East coast cattle slaughter was down 3 per cent the week before last, most of which was attributable to Queensland.

With Easter and Anzac Day coming up, it might take until May before we get a real handle on supply.

FIGURE 2: EYCI and eastern states slaughter cattle. After Easter, supply could drop, and the EYCI could head towards 600c/kg after follow up rain.

FIGURE 2: EYCI and eastern states slaughter cattle. After Easter, supply could drop, and the EYCI could head towards 600c/kg after follow up rain.

The impact of the rain on price has been dramatic.

The jump in the Eastern Young Cattle Indicator (EYCI) and the Cow price being most pronounced.

Heavy Steer prices were also higher but it is store stock and females that will be hit by a supply decline and demand lift.

What does it mean?

Cattle prices may have rallied, but are really only back to levels seen late last year.

There is plenty more upside if restockers have the confidence to push the market and follow-up rain will no doubt trigger another lift.

A widespread autumn break in the south will certainly see the EYCI head towards 600c/kg.

The story Rain has a dramatic impact on cattle prices first appeared on Farm Online.

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