May 7, 2004

 

 

Australian Cattle Prices Edge Lower Despite Larger Supply
 

Cattle prices in Australian saleyards edged lower again this week, despite a sharp jump in the number of beasts offered, marketing concern Meat & Livestock Australia Ltd. reported Friday.

 

"Yardings have increased right across the country, particularly for export cattle," MLA said in a weekly market review, noting a 51% jump in supply in New South Wales and a 38% rise in Queensland, the two major cattle states.

 

Prices for major cattle types are below last year's levels despite export prices and volumes to Japan and South Korea jumping from year-ago levels, while cow beef prices to the U.S. are also up.

 

These factors, plus a rise in Australian demand and an improved season in the north should have lifted cattle prices over this time last year, MLA said.

 

However, a lack of drought-breaking rains in the southeast has negatively affected cattle quality, as many producers are running short of feed and water, it said.

 

"Cattle markets are expected to lift soon, providing export demand remains strong as expected, and the Australian currency remains below US$0.75," it said.

 

Indeed, prices could rise sharply if widespread rains fall in southern states in May, it said.

 

Around two-thirds of Australian beef production is exported, making it a major world beef exporter and making export demand an important driver of prices in domestic saleyards.

 

MLA said that in Japan the Golden Week holiday this week is usually a high point for Japanese beef consumption, but trade buying is usually weak.

 

Buying usually resumes after Golden Week sales have been assessed, MLA said.

 

It didn't quote pries from Japan for this week, given the public holidays.

 

In Australia, a national price indicator for the type of beast suitable for Japan closed the week 3 cents lower at A$2.87/kg, still down from A$3.09/kg a year ago.

 

In the U.S. this week, the market for Australian beef continued to rise, amid tight U.S. cow beef supplies, strong beef demand and bullish meat sector generally, it said.

 

"The U.S. appetite for beef continues to grow, assisted by an improving economy," it said.

 

In the U.S., Australian frozen 95 chemical lean bull beef added 4 cents to US$1.28 a pound, including carriage, insurance and freight, well up from US$0.89/lb a year ago.

 

Frozen 90CL cow beef rose 2 cents to US$1.18/lb, up from US$0.83 a year ago.

 

The free on board prices in Australia for these products rose 12 cents and 5 cents to A$3.56 a kilogram estimated dressed weight and A$3.26/kg respectively, free alongside.

 

In Australian saleyards, a national price indicator for cows suitable for the U.S. trade slipped 2 cents to A$2.50 a kilogram estimated carcass weight, but is still up from A$2.29 a year ago.

 

A national price indicator for the type of beast suitable for the South Korea trade lost 6 cents to close the week at A$2.78/kg, down from A$3.05/kg a year go.

 

A national price indicator for domestic trade steers slipped 1 cent to settle at A$3.14/kg, down from a year-ago level of A$3.30/kg.