July 30, 2007

 

Weaker demand, cheaper prices for Australia's grown cattle

 

 

Demand has been weaker for Australia's grown cattle as medium weight steers and Japan ox reduced by 6 cents and 4 cents to 166 cents and 179 cents per kilogramme liveweight (kg/lwt), respectively, according to Meat and Livestock Australia (MLA). MLA said US cow prices are also prices down 3 cents to 127 cents/kg lwt; young cattle also recorded lower prices, with both the national trade and feeder steers down 1 cent.

 

Cooler weather and good seasonal conditions have contributed to a mixed trend in supply across markets reported by MLA's National Livestock Reporting Service (NLRS). National throughput has remained essentially unchanged, with only a 1 percent decrease on last week's total.

 

Yardings decreased 4 percent in Queensland, with numbers falling at Dalby, Warwick and Moreton but numbers at Longreach increased substantially, to record the highest offering there so far this year. Production in New South Wales (NSW) rose to 14 percent, led by Wagga and Casino due to the ongoing harsh winter conditions. Comparatively, Victoria fell 10 percent with both Pakenham and Korumburra lower, while South Australia (SA) numbers increased, largely a result of the higher numbers. In Western Australia (WA), the main change was witnessed at Midland, with around a quarter less numbers offered.

 

Although the majority of categories have recorded similar to slightly lower yardings, reductions were significant in the grown heifer and cow portion. National grown heifer yardings were 13 percent lower than last week. Similar trend also registered with cows with numbers nationally down by 4 percent. The fall in numbers could be attributed to the earlier turn off of stock, due to drier conditions and the recent downward price trend.

 

Numbers of trade cattle have remained similar on last week, however, the female portion has been slightly lower, assisting the already solid demand for these lines.

 

Despite a slight reduction in supply, demand was weaker across the majority of categories this week, particularly for grown cattle.

 

Demand across the young cattle categories has remained similar to recent weeks, although national average indicators have been firm, to 2 cents/kg lwt cheaper. Young cattle trading have emerged from feeder and restocker buyers. Female cattle gathered the greatest interest as feeder buyers remain active while restockers have mainly focused attention on steers. In Victoria, demand for young cattle has increased and prices have reflected the increased interest, with prices firm to 4 cents/kg higher, particularly for yearling steers and heifers.

 

Demand has weakened for grown cattle, although reduced supplies prevented further reductions to national average indicator prices, which were 4 cents and 6 cents/kg lwt cheaper. Medium steers sold to good demand in Victoria despite the decrease in national averages of up to 4 cents/kg. In NSW, the Japan ox indicator increased on top of falling numbers and illustrated the only stable trend for grown cattle across the states. Cows nationally demonstrated a similar downward trend to recent weeks.

 

Variations to seasonal conditions, along with mixed throughput have contributed to national indicator prices falling across all categories.

 

National young cattle indicator prices have shown a firm to cheaper trend. Less vealer steers have been offered, and although this assisted competition, the mixed quality on offer reduced prices 2 cents, to 194 cents/kg lwt. Demand for yearling steers was primarily from feeders and restockers, keeping the averages firm at 194 cents/kg. Feeder steer values also remained fully firm, to average 183 cents/kg and for the heavyweight yearling heifers, improving on the back of increased feeder interest and prices climbed 2 cents, to 180 cents/kg.

 

Export types were also cheaper despite a fall in supply. At the completion of sales on Thursday (July 26), the national indicators for Japan ox were 180 cents, a further reduction of 4 cents/kg on last week. The national US cow indicator also fell a further 4 cents, to 128 cents/kg.