April 30, 2007

Australia's export cattle prices down

National export cattle indicator prices eased, as a result of the strong A$ and weaker export markets. The national Japan ox indicator dropped 6 cents and the US cow indicator was 5 cents less, at 162 cents and 103 cents per kilogramme liveweight (lwt), respectively. Young cattle prices recovered due to tighter numbers being offered, with the benchmark EYCI (Eastern Young Cattle Indicator) rising 10 cents from last week to finish Thursday trading at 307.75 cents per kilogramme hundredweight (cwt).

National indicator prices have spiralled downward throughout the month of April due to increased numbers supplied as producers are continuing to relieve breeding stock as seasonal conditions not showing any indications of improvement. Contributing to decrease is the continued rise of the A$ and weaker demand from North Asian markets.

The national Japan ox indicator fell 6 cents from last Thursday (April 26), to 162 cents per kilogramme liveweight (lwt). Numbers of grown steers offered nationally this year to date are down 15 percent on figures for the same period last year. Up until a fortnight ago, the Japan ox indicator held consistently of between 170 cents and 184 cents/kg lwt. Current price levels are 9 percent below the same time last year and 3 percent below the five-year average. Queensland prices have posted the largest decline of all states, as a result of higher numbers being turned off over the past week. Increased numbers are anticipated to flow from central and northern Queensland as the cooler months approach.

The cow market followed a similar downward trend, with the national US cow indicator dropping 5 cents from last week, finishing Thursday trading at 103 cents/kg lwt. The US cow indicator has been on a steady downward trend since mid February and is currently 12 percent below the five-year average and 20 percent below the same time last year. A higher proportion of lower yielding cows have become available in recent weeks, along with weaker export demand, which has contributed to the cheaper trend.

Paddock feeder quotes have remained at consistent levels throughout March and April, but started to plunge over the past week. Physical market prices have also declined, with the national feeder steer indicator dropping 2 cents, to 163 cents/kg lwt.

Lotfeeders have been able to source more numbers of suitable breeds over the past weeks. Producers have been offloading more numbers in the areas where feed and water are becoming a concern. More of the heavy weight feeder cattle are coming into the market in Queensland. Competition has also weakened, with some operators showing caution and purchasing smaller consignments. Prices for grainfed cattle selling to processors have also declined quickly over the past few weeks. This, along with the continued high price of feed grains, has forced demand down and driven prices to cheaper levels.

Paddock feeder quotes declined 8 cents to 18 cents/kg lwt across all categories. Domestic steers averaged 167 cents and domestic heifers 152 cents/kg lwt - heavy feeder steers have been holding up in price more so than light weights, with these in tighter supply. These prices are the lowest since late December last year, and around 17 percent below the same time last year. Up until last week, prices had been tracking at between 4 percent and 10 percent below last year's levels.

Saleyard feeder prices in Queensland and Victoria were much cheaper with New South Wales only slightly lower and SA remaining similar to last week. Prices had falls of between 9 cents and 14 cents/kg lwt last week.

Grainfed cattle prices in Queensland fell sharply during the week, with forward contract prices also likely to decline for July delivery. Grainfed yearlings fell 4 cents, with steers averaging 325 cents and heifers 320 cents/kg cwt. The 70-day feeder steers averaged 318 cents and the 100-day steers, 336 cents/kg cwt.