Challenges mount for livestock markets
20 September 2012
The past week has seen little respite to the various challenges currently facing the Australian livestock sector, which is presently being reflected in lower prices for cattle, lambs and sheep. Increased cattle, sheep and lamb supplies, combined with little improvement in export markets and waning restocker demand is putting the squeeze on prices across all categories.
The EYCI this week hit a low of 358¢/kg cwt – the lowest daily level since mid-July 2010. The market for young cattle in recent weeks seems to have hit somewhat of a flat spot, with restocker and feed buyers increasingly reluctant to commit to purchasing given the dry finish to winter and little immediate prospect for relief. Additionally, some producers have been reportedly unwilling to sell young cattle at current levels, preferring to hold out for a spring break.
A higher supply of lambs continues to keep the lamb price in check, with most bypassing the yards and going direct to processors. Trade lambs this week averaged 388¢/kg cwt, while heavy lambs slipped 23¢, to 372¢/kg cwt. The increased flow of lambs and cheaper prices has also hit the mutton price, which fell to its lowest level since early 2009, averaging 174¢/kg cwt this week.
Accentuating the influence of the increase in beef and sheepmeat supply on prices are the stagnant export conditions, with very few markets currently looking to pay higher prices for additional product. Indeed, the global market has been going through a tough period in recent months, as caution reigns, with mainly suppliers with cheaper product being able to capture increased sales – a scenario that has been very unlikely for most Australian exporters given the high A$.