Cattle supply starts 2025 strong despite volatility, with quality and price risk management becoming key factors for the beef industry amid geopolitical and environmental uncertainties.
Albeit volatile, cattle supply kicks off 2025 in strong fashion.
Quality cattle presented in southern markets this year will be supported, expect widening spreads between the better presented and lesser quality animals.
Cattle price risk management is a key consideration for the beef industry to adopt in the face of continuing uncertainty of geopolitical relations and factors outside of the sectors control, which ultimately impact price.
With two thirds of Q1 2025 already over, the cattle market has well and truly settled into the year, mostly operating as you would expect.
So far, cattle supply has been strong, particularly numbers marketed out of the paddock, while in January, two consecutive weeks saleyards sold nearly 200,000 head. The saleyard numbers have been more volatile and Figure 1 below shows this.
National weekly cattle slaughter is already 15% or 127,000 head in front of YTD 2024 volumes, highlighting two key themes;
The availability of slaughter cattle continues to grow, both out of feedlots and also grass feds (less so for southern Australia though).
Processing facilities are handling these higher numbers well, evidence in their weekly throughput.
Figure 1. 2025 national weekly saleyard yardings.
For the month of February, Queensland saleyard cattle supply was lower than February 2024 plus the 3, 5 and 10-year averages. Now this isn’t because QLD doesn’t have any cattle and granted, some of these numbers will have been booked for direct sales, but I expect this Queensland supply to increase. Couple that with the northern mustering season having already begun for some operations and closing in for others, expect robust supply out of the state in 2025.
Victoria on the other hand, is clearly showing the effects of the drought the state is facing, with its February 2025 monthly yardings 88% or 38,000 head above the five-year average and 39% or 22,500 head higher than February 2024 volumes. Indicating producers continue to reduce numbers due lack of grass or a genuine liquidation because of no feed at all.
Feedlots continue to book cattle up to a month in advance and some further out, many are at rates softer than today’s spot price.
While processors are enticing strong supply, particularly on grass-fed kill cattle and cows with attractive grids, expect this to continue in the short to medium term due a distinct lack of supply. Watch the southern processors and potentially feedlots as they move north for an extended part of 2025 to secure numbers.
It’s always a factor, but hasn’t been something that’s been widely discussed of late, I think this year, particularly for the southern markets, any cattle of quality which are well presented with weight will command strong competition and in turn better returns.
Any cattle presented in secondary condition, with a lack of weight or poorly finished, are going to feel the brunt of price discounts and weaker demand. This will be important to monitor if the southern season continues to deteriorate without an Autumn break.
StoneX Australian Cattle swap continues to trade softer out to September 2025, at a discount of 15-20c/kg lwt on current spot prices. Essentially June through to September is trading in a tight 7c band, between $3.60 and $3.525/kg lwt.
The reasoning noted by swaps users behind the softer pricing is the expectation of large Queensland cattle supply when its mustering season gets moving in a widespread scale.
The current volatile global geopolitical climate, coupled with all the other factors that are entirely out of the cattle industry's control, including weather, prices and supply and demand are key reasons for the sector to be considering the adoption of price risk management strategies in their respective businesses to protect against unfavourable cattle price movements.
Ripley Atkinson's experience in the red meat industry and current role at StoneX developing price risk management tools for Australia’s sheep and cattle sectors ensures he delivers unique, whole of supply chain insights and analysis across key factors such as prices, supply, production and the drivers of the sheep and cattle cycles.
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