March 5, 2007

Australian cattle prices up
 

The benchmark Eastern Young Cattle Indicator (EYCI) continued the positive trend witnessed since the beginning of October, finishing at 330.75 cents - an increase of 7.5 cents kilogrammes hundredweight (kg cwt) on last week. Export cattle prices also increased, following tighter supplies. The Japan ox indicator gained 10 cents and the US cow 12 cents to 184 cents and 135 cents per kilogramme liveweight before slaughter (kg lwt), respectively.

The EYCI--an indicator of general cattle markets in Australia¡ªhas improved 20 percent since November last year, with a rapid rise occurring over the past few weeks as a result of seasonal conditions improving in some areas.

Restocker continues to underpin the market, particularly for the vealer steer category. The EYCI, though, remains 9 percent below the same time last year, with the average this summer 16 percent below last summer.

The national feeder steer indicator rose 25 cents in summer, and the national trade steer gained 16 cents - with the feeder steer indicator settling at 173 cents and the trade steer 175 cents /kg lwt.

Grown steer prices were steady during December, until picking up in late January. The Japan ox indicator gained 10 cents from last week and currently stands at 184 cents/ kg lwt - 11 percent higher than the first day of summer.

Patchy rainfall across the eastern states has the greatest effect on the cow market when compared with other categories at Meat and Livestock Australia's (MLA) National Livestock Reporting Service  (NLRS) reported saleyards. Cows, particularly the better bred and conditioned lots, tend to be held back by producers to consolidate their breeding herd when an autumn break is experienced.

This has seen cow numbers decline each week since the beginning of February, with 10 percent less penned this week. The quality of cows offered has shown no real improvement, with most centres reporting less better conditioned and heavy weight lines. This is a continuation of a trend witnessed throughout 2006 and during the beginning of this year, with medium weights dominating.

Prices for cows in the physical market experienced a further upward movement during the week following last week's rises. The national US cow indicator finished Thursday at 135 cents, a rise of 12 cents /kg lwt. When comparing the values across the cow weight ranges, the largest percentage price gains were for well conditioned medium weight lines. Light weight categories also received large percentage gains, mainly during mid February, although from a low base.

Over the hooks cow prices strengthened in all states this week with the exception of Western Australia (WA) and Tasmania. A tightening of supply in central and northern Queensland two weeks ago after widespread rainfall pushed export abattoirs further south and, consequently, condensed competition in southern Queensland, New South Wales and Victoria. This created additional competition at most centres and assisted prices to rise. Less numbers in South Australia (SA) have also created higher prices. Despite this, over the hooks rates remain well below the same time last year, particularly in WA, SA, Victoria and Tasmania.