Weekly cattle and sheep market wrap
18 November 2022
Key points:
- Yardings across both cattle and sheep sales declined as expected.
- The cattle market reacted to more cautious buyer sentiment, driven by wet weather and market performance challenges.
- Sheep and lamb prices improved strongly on the back of tighter supply, highlighting intense volatility in the market.
Yardings fall as expected
To nobody’s surprise, supply tightened significantly across both species in most states this week. It’s been a common trend over the past three months as wet weather continues to impact transport access and mustering capability. However, the large supply last week allowed producers time to reset their marketing strategies to reflect more normal supply fluctuations moving forward.
Cattle
National cattle yardings fell 29% or 16,250 head week-on-week and state declines performed as follows:
- WA yardings declined by 42% or 1,158 head to 1,598
- Queensland yardings softened by 28% or 7,418 head to 18,900
- NSW numbers fell by 49% or 9,126 head to 9,870.
South Australian yardings improved by 29% or 565 head and Victorian yardings also strengthened by 9.5% or 633 head.
Sheep
National sheep yardings fell by 47% or 187,000 head week-on-week and state declines performed as follows:
- NSW numbers declined by 60% or 127,000 head to 83,000
- Victorian numbers fell by 43% or 57,000 head to 76,000
- South Australia yardings were firm, only softer by just over 1,000 head
- WA yardings were firm.
Cautiousness driving cattle market
Distinct differences in market performance across species and categories indicates differing buyer demand and cautiousness is clearly affecting attitudes at the yards.
In the cattle market, buyer confidence appears to have been impacted by wet weather affecting cattle performance and the logistical issues associated with transport, mustering and access to trucks. The Eastern Young Cattle Indicator (EYCI) fell to its lowest price since mid-August at 996c/kg cwt, with all buyers softening their price expectations due to the market falling across restockers, feeders and processors. The EYCI has softened 20c over the week and 36c/kg cwt over four weeks.
The National Feeder Steer price also softened, with challenging operating conditions relating to input prices and wet weather impacting cattle performance in the feedlot clearly impacting feedlot buyer demand. Its price declined 21c this week to finish at 479c/kg lwt. The indicator has also declined by 38c over four weeks, mirroring the fall in the EYCI.
Volatility of the sheep market the headline of 2022
A key sale that defines how the sheep and lamb market has performed this week – as well as for large parts of 2022 – is the Wagga Wagga sale. From last week’s all-time record yarding of 80,050 head and prices softening significantly across all categories, through to this week’s reduced yarding and a massive improvement in price, the intense volatility of the market is as clear as it comes.
The National Heavy Lamb Indicator (NTLI) improved 46c/kg cwt on Thursday on the back of the significantly reduced yarding at Wagga driving robust demand, clearly engaging buyers to secure stock from a smaller supply pool. The indicator hit 759c on Thursday after reaching its lowest price point since late August of 715c/kg cwt on Wednesday.
Clearly the effects of the major volatility in yardings and price performance (using Wagga as an example) defines how challenging the market conditions of sheep and lambs are now.
The National Mutton Indicator also hit its lowest price point since January 2020 this week.
