August 1, 2011

Australian cattle supply drops in June-July

July cattle supply in Australia's eastern states 13% on-year at the physical markets fell and 14% on June throughput, as reported by local analysts.

Every state turned off fewer cattle, with Queensland markets the least affected, with numbers only back 6%.

NSW supply was inconsistent throughout July, with overall numbers 15% lower on last year. It was a similar trend across Victoria where rainfall and the cold restricted supply by 19% on-year. SA cattle yardings were the most affected, with supply noticeably lower later in the month when two processors were on annual maintenance breaks.

While the composition of the yardings was reasonably similar to previous years, the trend of producers retaining females increased. With the return to generally favourable grazing conditions due to the season and prices, producers were still looking to rebuild herds. Yearling heifer turns off declined by 24% on-year, while cow yardings were back 16% on July 2010.

Grown steer consignments were back 7% on the same period in 2010, although NSW supplies managed to lift 19% on-year. Solid grown steer supplies at CTLX, Dubbo and Wagga pushed NSW yardings higher. Producers have entered into the winter months with good fodder reserves and active pastures, which has allowed cattle to put on extra weight. Medium weight C3 grown steer prices averaged US$1.75/kg lwt, or US$955/head over the month of July.

Feeder demand during July slowed, with buyers easing paddock rates and sourcing fewer cattle at saleyards in response to subdued demand in key export markets. This opened the door for restocker and backgrounder orders to secure a higher proportion of young cattle - at more sustainable prices compared with early 2011.

The Eastern Young Cattle Indicator (EYCI) averaged 376¢/kg cwt during July, 6% higher on-year. Despite young cattle prices softening after the March peak, prices were relatively stable in July, with only a 3% variation in the EYCI recorded.