September 20, 2004

Australian Cattle Market: Prices Rose This Week; Young At Record

Cattle prices in Australian sale yards mostly rose again this week, with young cattle categories reaching record highs and export cows and steers pushing to near-record levels, marketing concern Meat & Livestock Australia Ltd. reported Friday.
 
MLA said its Eastern Young Cattle Indicator extended its advance, hitting a record A$3.98 a kilogram of estimated carcass weight, exceeding a previous record of A$3.8525/kg set three years ago. The index is up 25% from midyear and 20% from September 2003, it said.
 
An export cow price index is up 30% from a recent low point in April and 20% above a year ago, while grown steers are up 10% on the year and 17% higher than midyear, it said.
 
"The buoyant cattle market is being driven by strong demand for Australian beef from Japan and (South) Korea" due to the absence of U.S. products, it said in a weekly market review.
 
"The recent rain across the eastern states has also served to tighten supplies of younger cattle and rekindle store and restocker interest," it said.
 
MLA reported extraordinary demand for young cattle for grass and grain feeding for Japan.
 
Prices for young cattle are expected to ease a little in coming months as numbers improve seasonally in southern Australia, while export steer and cow prices could hold steady or rise a bit, it said.
 
Prices for Australian beef in the two major export markets of Japan and the U.S. rose again this week.
 
Around two-thirds of Australian beef production is exported, making the country a major beef exporter, and so export demand is an important driver of prices in domestic sale yards.
 
In the U.S. this week, the market for Australian beef improved due to tight imports and domestic supplies.
 
U.S. imports of beef from New Zealand and Uruguay have fallen, while domestic U.S. cow beef supplies remain tight, with slaughter rates in the year to August 16% below year-ago levels, MLA said.
 
In the U.S., Australian frozen 95 chemical lean (CL) bull beef remained unchanged on the week at US$1.48 a pound (including carriage, insurance and freight), still up from US$1.16/lb a year ago.
 
Frozen 90CL cow beef added 2 cents to US$1.41/lb on the week, up from US$1.08 a year ago.
 
The free-on-board prices in Australia for these products fell 6 cents and 1 cent, respectively, on the week to A$4.34 a kilogram of estimated dressed weight and A$4.10/kg free alongside.
 
In Australian sale yards, a national price indicator for U.S. cow grade of 400-520 kilograms surged 23 cents during the week to A$3.32 a kilogram of estimated carcass weight, up from A$2.69/kg a year ago.
 
MLA said demand for Australian beef remained healthy this week.
 
But Australian exporters have diverted some beef to the U.S. from Japan, with many exporters intent on filling their U.S. quota entitlement, it said.
 
Prices in Japan for Australian chilled grass-fed fullsets edged 2 cents higher this week to US$2.05 a pound, including carriage and freight, up from a year-ago level of US$1.61/lb. A fullset comprises about a dozen different cuts of beef.
 
The estimated free-on-board price for this product in Australia was quoted at A$6.07 free alongside, down 3 cents on the week, but still way up from A$4.93 a year ago, MLA said.
 
In Australia, a national price indicator for Japanese ox-grade of 500-600 kilograms rose 2 cents to close the week at A$3.62/kg, up from A$3.16/kg a year ago.
 
A national price indicator for a medium steer of 400-500 kilograms lost 4 cents to close the week at A$3.52/kg, up from A$3.05/kg a year go.
 
A national price indicator for trade steers of 330-400 kilograms added 6 cents to settle at A$3.87/kg, up from a year-ago level of A$3.36/kg.