September 27, 2004

Australian Cattle Market: Prices Fall As Supply Rises

Cattle prices in Australian sale yards mostly fell this week, weighed down by increased supply as producers sought to capitalize on the recent high prices, marketing concern Meat & Livestock Australia Ltd. reported Friday.
 
As a consequence, MLA's Eastern Young Cattle Indicator retreated from last week's record high to close at A$3.85 a kilogram of estimated carcass weight, down 12.25 cents.
 
The strong cattle market this year has been underpinned by consistent export demand from North Asia and the U.S., plus the number of cattle offered falling 3% in the first eight months of the year from the year-earlier period, it said.
 
Historical trends suggest that cattle supplies in September and October increase significantly primarily due to the spring flush of cattle in southeast Australia, a trend that appears to be happening again this year, it said.
 
The number of cattle offered at major saleyards rose 17% this week from last week, it said.
 
Prices for Australian beef imports in both major export markets fell 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 softened, primarily due to weaker demand for manufacturing product, MLA said.
 
Demand for this product weakened in the food service sector, due to lower-than-expected sales during the end of summer holiday period, it said. Demand from the retail sector also eased from the relatively higher price of ground beef compared with alternative meats, it said.
 
As of Sept. 20, U.S. Customs had cleared 230,880 metric tons of Australian beef imports this year, down 6% from a year ago and comprising 61% of the tariff-free quota.
 
In the U.S., Australian frozen 95 chemical lean bull beef fell 4 cents this week to US$1.44 a pound, including carriage, insurance and freight, but is still well up from US$1.11/lb a year ago.
 
Frozen 90CL cow beef shed 5 cents to US$1.36/lb on the week, but is up from US$1.01 a year ago.
 
The free-on-board prices in Australia for these products fell 23 cents and 13 cents, respectively, on the week to A$4.11 a kilogram of estimated dressed weight and A$3.87/kg free alongside.
 
In Australian sale yards, a national price indicator for U.S. cow grade of 400-520 kg fell 11 cents during the week to A$3.21/kg of estimated carcass weight, but is still up from A$2.65/kg a year ago.
 
MLA said the Japanese market was subdued with many Japanese taking holidays as two public holidays fell this week.
 
Prices in Japan for Australian chilled grass-fed fullsets lost 4 cents this week to US$2.01/lb, including carriage and freight, but up from a year-ago level of US$1.69/lb. A fullset comprises about a dozen different cuts of beef.
 
The estimated FOB price for this product in Australia was quoted at A$5.81 free alongside, down 26 cents on the week, but still way up from A$5.08 a year ago, MLA said.
 
In Australia, a national price indicator for Japanese ox-grade of 500-600 kg lost 9 cents to close the week at A$3.53/kg, but is up from A$3.09/kg a year ago.
 
A national price indicator for a medium steer of 400-500 kg edged 1 cent higher to close the week at A$3.53/kg, also up from A$3.09/kg a year go.
 
A national price indicator for trade steers of 330-400 kg lost 3 cents to settle at A$3.84/kg, but is up from the year-ago level of A$3.35/kg.