Slaughter and feeder markets remained under pressure this week falling another 10-20c/kg dw as processor and feedlot bookings fill up with sustained forced turnoff across NSW and a seasonal increase in QLD cattle supply.
Markets are down around 10-15% since near record levels in mid-March with increased freight and grain costs also contributing factors.
This chart shows national saleyard averages for major cattle categories in c/kg liveweight. Source: NLRS & MLA
The sharp retraction in cattle prices will help offset higher freight and grain costs and will assist restocker and feeder demand moving forward. The key to price levels moving forward will be whether global beef prices hold and how the local industry navigates its way around looming beef export market restrictions in China and Korea where safeguard quotas are filling up fast and are around two-thirds full.
Live export cattle values have eased in line with falls in southern Queensland feeder and fat markets with Indo feeders $4.60/kg Darwin at start of March back to $4.20c/kg (prices are quoted in liveweight except where state). Darwin shipments are still being topped up with Queensland cattle with prices quoted delivered Darwin rather than Cloncurry with the vendor carrying freight cost risk. Cows for live export are $2.80-3/kg depending on port.
A live export boat order was close to being filled @ $3.80/kg Townsville, but they did need to top up from saleyards closer to $4/kg - the most recent prior shipment ex Townsville filled in two days at $4.20/kg.
The Broome market was unchanged at $4.20/kg for Indo feeder cattle with some cow interest likely to come to a head during this week with estimates from $2.70 - $2.90/kg.
Further south the Central Queensland and Southern Queensland feeder and fat markets remain under pressure from increased turnoff. Queensland flatback feeders $4.70/kg Downs back 10c/kg lw. Bullocks back 10-20c/kg dw to $7.60-7.80/kg dw, same with cows to $6.80-6.90/kg dw and under pressure in direct to works markets.
The season is excellent for 75% of Queensland which is supporting weaner prices at $5-5.80/kg lw depending on type, there is a gap back to weaner heifers that are quoted at a wide range of $3.20-4/kg lw reflecting limited buying interest in markets where often there is only one buyer.
While most of Queensland is good, the dry patch is dismal and runs from south of Warwick to Goondiwindi out to Cunnamulla up to St George. To put into context the difference in seasonal conditions, Goondiwindi has had two inches this year so far vs Alpha in CQ that has had 40 inches.
Complicating the southern Queensland feeder cattle outlook has been the jump in grain prices to $420-430/t Downs feedlot (up $60-70/t or 20% in the past month) with key supply areas in southern Queensland and northern NSW very dry and unlikely to plant much winter crop given high cost of inputs and lack of subsoil moisture.
Growers still hold considerable volumes of wheat and barley on farm but have no interest in selling until they receive planting rains with skyrocketing fuel and fertiliser prices reinforcing negative sentiment and keeping grain stocks tightly held. Traders are doing the sums on bringing barley into Queensland from WA/SA with back of the envelope calculations landing the grain at $450/t delivered Downs.
Our northern NSW agents report that there's been a hell of a lot of weaners sold out of the traditional weaner areas in the New England. Backgrounders further west who normally take these cattle to feedlot entry weights are also now hitting the exit button. The country around our feedlot in Killara on the Liverpool Plains has never been as threadbare.
Producers have offloaded pregnant heifers and older cows and are now moving on good quality young to middle-aged cows in calf. With mild temperatures, cattle have held their condition quite well and they're still strong and healthy and right to travel. But as we move further into autumn and its starts to cool down, cattle condition will start to deteriorate. The message is that there are plenty of quality store cattle in the right condition to trade now, but the sooner that you act the better. There were 7,000-8,000 cattle yarded at both Tamworth and Gunnedah this week.
The big offload of cattle through northern and central NSW has raised concerns about suitable weight feeder cattle supplies for southern feedlots. This explains why Angus and British cross feeder values have held their own with spreads to flatbacks increasing in recent weeks to 20-30c/kg for British cross and 40-50c/kg Angus.
Tightening southern cattle supplies and a fall in northern cattle prices has encouraged southern processors to jump in cars and planes and head north but only as far as Dubbo and Tamworth where they can buy as many cattle as they need. As NSW turnoff slows over the next few weeks, these buyers will jump in the car and head to Queensland with the fall in northern cattle values making it economic to truck cattle south despite the higher taxi fare (see widening gap in Victorian and Queensland saleyard cow prices).
This chart shows saleyard prices for cows in QLD & VIC. Source: MLA
Many mixed farmers are considering increasing fallow with some around Dubbo considering not planting a crop for the first time since 1964, given the high risk of planting a crop into no moisture, given the cost of diesel and fertiliser. This sentiment extends to growers through southern NSW and into the Victorian Wimmera/Mallee. This will help support the restocker sheep market and might explain why we are seeing a lift in merino and light lamb values.
Eastern Riverina copped some rain, but western Riverina remains dry. A lack of decent follow-up means that there is only some green pick for sheep across the Riverina but with the cold weather approaching, its unlikely there will be much cattle feed grown before winter. There will be lots of livestock feeding again through the Riverina this winter.
Conditions are better further south in Victoria where there was some more rain last week. Rainfall totals varied significantly with 2-12mm through the western District, depending on what side of the hill you're on. Through central and north-east Vic, there was generally 20 to 30mm.
But the rain also brought a change in the weather that has led to some hesitancy as the growing season looks to be coming to an end quickly. There really needs to be a good dump of rain throughout Victoria and the Riverina to fill dams and get creeks running with stock water again looming as an issue.
A couple of store cattle sales around the traps last week were strong compared to those further north. Little black steers are still making $6 and high $5/kg in spots with heifers making mid $4/kg to even higher $4/kg for some well-bred types in Gippsland. This good money is dragging these calves out with some graziers happy to take the money while it's there because of the uncertain conditions in the north.
Lamb and sheep markets are firm at $11-12/kg dw for lambs and $8.50/kg dw for mutton and remain well supported by seasonally tighter supplies. Scanning and lambing/calving rates across the south are strong.
SA producers have had a good strike on fodder crops and there is plenty of young stock doing well on vetch. Producers further west in SA, in the mid-north and across on the peninsula are looking to restock with scanned in lamb merino or xb ewes. Confidence is growing in the sheep/wool job with feeder lambs worth shearing for $20-40/head of wool before offloading to a feedlotter.
In WA, cattle markets were relatively unchanged with slaughter cows still sitting around about that $6.80 to $7/kg dw. Feeder steers from $4.30 to $4.80/kg, feeder heifers are about the same at $3.80 to $4.40/kg, with the lighter steers to graze $4.90 to 5.20/kg lw.
Southern WA graziers have had good germination on fodder crops and are pushing the lightweight cattle market along a bit. Cyclone rain across southern and eastern WA pastoral areas was well received and has stopped turnoff through the southern Pilbara, Murchison, Gascoyne, and Goldfields. This will push pastoral cattle back to Spring which might cause some processor capacity issues later in the year with the northern Pilbara and Kimberley season also being delayed due to it being too wet to move stock.
Australian beef export prices to the US continue to hold at near record levels, supported by high US domestic lean beef values and low US cow slaughter, despite increasing competition from south America.
US demand for imported beef has underpinned the rise in global beef prices over the past few years and will be called on to do more heavy lifting to absorb increased beef supply from Australia and Brazil as Chinese beef import restrictions start to bite mid-year.
Australia exporters have filled around 50-65% of safeguard quota levels to China and Korea and on current export pace will fill these quotas by early June after which our beef exports to these markets will be levied at 55% and 24%, respectively. Already buying into these markets has taken on a more cautious tone in fear of the quota being triggered.
The US market looms as a key relief value for Australian exporters around mid-year as chilled beef exports are diverted from north Asia. US beef demand has remained resilient in the face of a myriad of economic challenges, supported by lower US beef production (-8% year to date).
However, with rising fuel costs further tightening shopping budgets and beef losing competitiveness to white meats, US beef demand will be challenged. It is with some concern we note that US wholesale beef prices have recently fallen counter seasonally as wholesalers reduced prices to clear lingering inventories. Buying interest ahead of the summer grilling season is yet to materialize with wholesale demand subdued amid ongoing cost volatility and uncertainty.
This chart shows USDA choice boxed beef cutout wholesale values. Source: USDA
Elders Business Intelligence Analyst Richard Koch combines a deep understanding of global market dynamics with regular insights from Elders staff on the ground, providing informed analysis shaped by both data and real-world observations.