October 1, 2007

 

Australia's cattle demand still weak

 

 

Australia's cattle saleyards was down 4 percent last week, data from the National Livestock Reporting Service (NLRS) of the Meat and Livestock Australia (MLA) shows. However, competition was still weak, as the majority of categories suffered further price falls. Trade and feeder steers averaged 162 cents and 155 cents/kg lwt (liveweight), respectively. Medium weight grown steers and Japan ox fell to 157 cents and 170 cents, respectively, while US cows lost 6 cents.

 

National cow prices have varied within the medium weight (400 to 520 kilograms) cow category purchased by processors at saleyards in September, according to MLA's NLRS.

 

Nationally, the supply of medium weight cows at MLA's NLRS reported saleyards rose 17 percent in September compared with August due to continual dry conditions and increasing cost of supplementary feed.

 

The D muscled categories represented 95 percent of the medium cow yarding. Cow prices during August and September were low when compared with historical levels. The high value of the A$ and the influence of larger supply due to the poor seasonal conditions resulted in the weaker price trend.

 

The C muscles achieved the highest average prices in both August and September, at 140 cents and 131 cents/kg lwt respectively. Despite remaining the highest, this category lost 7 percent in value in September and only represented 3 percent of the total medium weight cow offering. The D3 cows accounted for slightly over half of total cow numbers offered during September, a rise on the 46 percent on August. National prices for this category averaged 5 percent lower in September compared with August, dropping from 123 cents to 117 cents/kg.

 

As supply remained large at physical markets and direct to works, there was much weaker demand for the poor conditioned cows. This resulted in the E muscled categories falling 17 percent in value in August compared with September.

 

At present, the national indicator price for the US cow category is 118 cents, which is 6 cents/kg lwt below last week, and 9 percent lower than this time last year.

 

Numbers of C muscle vealer and yearling cattle at MLA's NLRS reported saleyards increased only slightly (up 6 percent) on last week. Yearlings, however, increased 12 percent. There was virtually no interest from restockers or feeder buyers on vealer steers and heifers, resulting in the market being dominated by processors. This has been reflected in the prices, with medium weight C2 vealer steers averaging 5 cents cheaper, at 160 cents/kg lwt.

 

Numbers of C2 medium weight yearling steers purchased by feeder buyers were similar to last week. When compared with last year though, feeders have secured 43 percent less. This has resulted in the national feeder steer indicator sitting at 155 cents/kg, 10 percent lower than last year.

 

The value of trade C3 yearling steers to processors was 3¢ cheaper when compared with last week at 162 cents/kg. Feeder activity on suited lines of yearling heifers has doubled on last week, and is 6 percent higher than the same period last year - assisting C2 feeder heifer prices to remain firm.

 

The benchmark Eastern Young Cattle Indicator (EYCI) at the completion of Thursday's markets resided at 292 cents, down 9.75 cents/kg cwt (hundredweight) on last week, its lowest level since January 2007.