RIGHT now might be the best window of opportunity for buying young cattle that 2023 presents with prices having fallen away across the board but all signs pointing to support not being far away.
The belief the cattle market is undervalued at present is widespread among analysts and agents.
The Eastern Young Cattle Indicator has slipped another 30 cents a kilogram carcase weight over the past week to sit at 762c, which is a whopping 369c below the year-ago value.
However, the industry analysts team that offers up an EYCI forecast as part of Meat & Livestock Australia's projections has the EYCI at 811c by mid year.
Not only would that be a sizeable jump on where it is now but it would be 60c/kg, or 8.5pc, above the five-year average.
Further, their forecast is for the feeder steer price to reach 420c/kg live weight, an uptick of around 25c/kg on current rates and 8pc above the five-year average.
Feeder buyers
The restocker buying portion of the EYCI has this week slipped to a low 43pc, with feeder buyers currently taking half the EYCI offering.
MLA's expectation of an improvement in feedlot buying demand in the market this year is already starting to show.
Market information manager at MLA Steve Bignell said a number of 2022 outcomes, which occurred during a period of herd rebuilding, show growth in the feedlot sector is here to stay.
"In the early parts of last year, 60pc of Australian beef consumed was grainfed," Mr Bignell said.
"On top of that, in September capacity reached a new record - feedlotters see a good future in the industry and are building more pens.
"The other record set was 1.27 million head on feed in the last quarter.
"As an uptick in cattle supply comes on in 2023, the proportion of turnoff that grainfed holds might fall but the actual number will increase."
Restockers
While the big numbers on offer during January, particularly in the south, have come off the boil a bit, restocker demand has cooled significantly, agents report.
Jack Hickey, JM Ellis & Co at Hamilton in Victoria, said there was nowhere near as many people lined up to buy at the moment.
"There are probably cattle sitting out there that might owe people a few more bob than what is on offer at the moment, so people are sitting on them for now and that means they're not restocking," he said.
"But it does look like we've already hit ground zero in terms of prices.
"There are definitely buying opportunities out there now, but confidence is a big thing."
Mecardo analyst Adrian Ladaniwskyj said reports of a solid contingent of restockers attending saleyards in the north suggests that there may be some pent-up demand lurking.
Many areas in the top end still have the benefit of solid pastoral conditions behind them, he pointed out.
"The outlook in the United States is also likely to provide solid support to cow prices going forward, in the absence of any huge jump in the value of the Aussie dollar," he said.
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
