The cattle market took a step back last week (week ending November 8). Online on AuctionsPlus, averages dropped by 5-70c for all store and feeder cattle across all weight class of steers and unjoined heifers, this is off the back of a rise for all categories the previous week (November 1). Further to this, the MLA EYCI week to week fell from 633c to close of on November 8 at 615c. However, rather than this being a genuine fall in price and reduction in buyer demand, I feel this the Spring market working itself out as numbers are on offer. Online clearance for steer categories 0-400kg were all above 80%.
The mutton indicator this week (as at November 12) has held its position, off the back of the largest weekly kill of sheep reported by NLIS since 2006. The week ending October 25 2024 saw a reporting of 246,000 head slaughtered. The past two weeks hasn't seen these number really slow either with 232,000 (November 1) and 230,000 (November 8) slaughtered. The mutton indicator closed off at 322c on November 12. For the calendar year the indicator peaked at 482c in July when supply was extremely low. Now we are into Spring/Summer there is a flow of mutton supply, and a 10%-20% drop from July is not uncommon.
A strong 90CL indicator (the indicator tracking the importation of trim meat sold into the US) has seen high demand for processors cows, seeing many producers look to sell cull cows and de-age their herds. Cows sold to processes reviewing MLA figures shows the numbers are a five-year high. with 383,000 sold so far for the year. 2019 (the tail of the 2016-2019 drought) saw 464,000 cull cows sold. I forecast that we will break 400,000 head cull cows sold by the year's end. On August 2, 2024, the indicator hit 987c/kg AUD.
Australian cattle remain extremely competitive in the global markets, and a US herd in liquidation is driving demand. Comparing the MLA National Feeder Indicator and the US CME Feeder Cattle Index (c/kg lw AUD), the US index has traded 300c over the Australian indicator since May 2023. Over the past three months, this has been rising, Australian feeders are cheapening, and American feeders are getting more expensive. Over the past few months the difference US Feeders hold is 431c (September), 476c (October) and 491c (up to November 6).
Sheep and wool growers appear to be "picking the eyes" out of unjoined Merino ewe and ewe hoggets at the moment. 58,000 ewes and ewe hoggets have been offered online on AuctionsPlus across the past four weeks (ending November 15). While clearance has been reducing week to week, to average below 65%, the maximum and average prices paid has had only $20-$30 movement across the past few weeks. This appears to be indicative of the current sheep market, large numbers but with a good season buyers, while being selective, are looking for opportunity.
Sources: Meat & Livestock Australia, AuctionsPlus, NLRS, CME
Tom Rookyard is the General Manager at Ottley Livestock Finance.