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Weekly cattle and sheep market wrap

25 November 2021

Key points:

  • The EYCI and Feeder Steer hit new records this week
  • Gunnedah cattle sale didn’t proceed this week
  • Mutton prices surge, while larger lamb yardings soften prices slightly
  • Exports to Korea have exceeded the preferential safeguard limit – meaning all beef sent to Korea for the remainder of the year will attract a 30% tariff

EYCI and Feeder Steer records 

Recent widespread rain events have spurred on the EYCI and feeder steer prices, with both hitting new records this week. The EYCI hit 1,105.5c/kg cwt on the back of strong results in Dalby, Roma and Wagga. Overall, there were 2,800 less young cattle transacted than a week ago. This was partially due to flood-related logistical issues, especially the cancellation of the Gunnedah sale.

The Feeder Steer Indicator hit a new record of 552c/kg lwt on Tuesday. Interestingly this record was achieved with an additional 1,300 head throughput. Dalby drove the rise, yarding an extra 1,000 feeder cattle at a 20c premium to the national indicator. 400kg+ yearling steers made up the lion’s share of feeder throughput.

Gunnedah sale closed

On Tuesday, flood waters caused the cancellation of the Gunnedah sale. Last week, Gunnedah yarded 1,890 cattle and accounted for 9% of EYCI cattle. The closure of this sale highlights there have been a number of flooding related logistical issues, but there hasn’t been widespread redistribution of cattle to other saleyards as a result.

The Tamworth sheep sale went ahead on Monday, with a small yarding. Due to rising flood waters, MLA did not report on the 600 head at this sale.

No other sales have been cancelled this week.

Mutton surges

Since 5 November, mutton prices have surged 15%, from 549c/kg to 630c/kg. In the last two weeks, wethers have made up an increasing percentage of the mutton yardings, receiving a 2c/kg premium over ewes.

In the last two weeks, mutton yardings have increased 30%, yet despite this, prices have continued to rise. This shows there is demand from restockers and processors alike for mutton.

Lamb falls

Bigger lamb yardings have been putting downwards pricing pressure on heavy, trade and light lamb categories. From a trade lamb perspective, since the November rally reached its peak of 862c/kg 17 November, yardings have increased 20% and prices have eased 3%.

Korean safeguard reached

Australian beef exports to Korea for the remainder of the year will attract a 30% tariff, 11.4% above our preferential rate of 18.6%, set in the Korea-Australia Free Trade Agreement (KAFTA).

Under KAFTA, Australia could export 177,569 tonnes of beef to Korea in 2021 at an 18.6% duty. After the safeguard was triggered, the tariff on Australian beef increased to 30% for the rest of the calendar year.  

While the safeguard has incrementally increased since KAFTA entered into force and will be entirely phased out in 2029, it has been triggered each year since the agreement’s inception.  

Product shipped prior to the point of the safeguard trigger, but which has yet to clear customs, will be allowed to enter at the lower tariff rate.

The excess tonnage sent by the end of 2021 will be subtracted from the 2022 safeguard volume.