May 17, 2004

Australian Cattle Market: Prices Mixed; Export Steers Up

Cattle prices in Australian saleyards closed mixed this week with heavy export steers rising, but cows and trade cattle slipping, marketing concern Meat & Livestock Australia Ltd. reported Friday.
 
"Heavy steer prices jumped this week as continued strong demand from export markets combined with a tightening supply of well-finished heavy grassfed steers," MLA said in a weekly market review.
 
Also helping export demand has been a recent weakening of the Australian currency, which this week plumbed 7-month lows around US$0.6855, well below a 7-year high of US$0.8008 in February.
 
The weaker currency is a welcome relief for many red meat exporters, who have been stung by a strong currency over the past two years, MLA said.
 
"The lower Australian dollar could also lend support to cattle prices, though this process would normally take at least two weeks to a month after the dollar settles at a new level," 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 biggest export market, the wholesale beef market was strong this week with good sales of both Australian and domestic meat.
 
Prices in Japan for Australian chilled grass-fed fullsets were quoted this week at US$1.94 a pound, including carriage and freight, up from a year-ago level of US$1.52/lb. A fullset comprises about a dozen different cuts of beef. Last week's prices were not given because public holidays disrupted markets.
 
The estimated free on board price for this product in Australia was quoted at A$5.78 free alongside, well up from A$4.83 a year ago, it said.
 
In Australia, a national price indicator for the type of beast suitable for Japan closed the week 10 cents higher at A$2.97/kg, up from A$2.92/kg a year ago.
 
In the U.S. this week, imported manufacturing beef prices jumped to near 10-year highs "as buyers sought to secure the limited supplies available on the spot market," MLA said.
 
Prices for these products usually decline in late April and May as buyers tend to run down stocks in anticipation of lower prices during the period, MLA said.
 
"However, this week, supplies of imported product have been light and some shipments have been delayed, requiring buyers to enter the spot market to fulfill their orders," it said.
 
In the U.S., Australian frozen 95 chemical lean bull beef jumped 5 cents to US$1.33/lb, including carriage, insurance and freight, way up from US$0.87/lb a year ago.
 
Frozen 90CL cow beef also added 5 cents to US$1.23/lb, up from US$0.82 a year ago.
 
Helped by the weaker Australian currency, the FOB prices in Australia for these products surged 34 cents and 31 cents to A$3.90 a kilogram estimated dressed weight and A$3.57/kg respectively, free alongside.
 
In Australian saleyards, a national price indicator for cows suitable for the U.S. trade slipped 7 cents to A$2.43/kg estimated carcass weight, up from A$2.05 a year ago.
 
A national price indicator for the type of beast suitable for South Korean trade jumped 19 cents to close the week at A$2.97/kg, up from A$2.87/kg a year ago.
 
A national price indicator for domestic trade steers eased 3 cents to settle at A$3.11/kg, down from a year-ago level of A$3.12/kg.