March 20, 2012

Australia's cow yardings decline

Australia's cow yardings have declined 5% on-year, with turnoff lower in the eastern states, following the general lower trend in cattle supplies, with total yardings tracking 13% lower, compared with the same period in 2011, according to reports.

The biggest change in cow supplies was recorded in New South Wales, with year to date numbers falling 13% on-year, while Queensland numbers declined 7%. Above average rainfall and flooding restricted the ability of producers to offload breeders across many regions, while the ongoing strong seasonal conditions have reinforced the desire to rebuild herds after years of drought.

Victorian numbers were only 2% lower, and numbers declined 6% in South Australia. Hot and dry conditions in several regions prompted graziers to sell a higher proportion of females compared with New South Wales and Queensland. Western Australia cow supplies were significantly higher - lifting 40% as producers sold a larger proportion of cattle in the physical markets as stronger buying competition resulted in higher prices.

The number of cows purchased by restockers lifted 29% on-year, with buying activity focusing on medium weight drafts. Despite increased demand, and more cows returning to the paddock for breeding, restocker cow prices have averaged 2% lower for the year to date, at US$0.138 per kilogramme.

Cow quality has remained excellent in early 2012, with heavy cows dominating yardings, accounting for 56% of supplies. This was very similar to the previous year, as producers in the eastern states experienced favourable grazing conditions. This also contributed to a higher proportion of better conditioned cows, while calf weaning weights were again above average.

The national medium cow indicator averaged two per cent lower for the year-to-date compared with the same period last year, settling on US$0.145 per kilogramme. This was despite the Australian dollar averaging 5% higher on US$105.7 (RBA). Global demand for manufacturing beef has been historically strong in early 2012, which has offset the negative effects of the higher currency. This has resulted in 90CL beef prices trading at record levels in recent weeks, with US demand for manufacturing beef robust.