Slaughter swells, prices cool

Cattle

Dry conditions have driven eastern states cattle slaughter to hit a 28-week high, with just over 137,000 head processed last week.

Numbers were up 10% week-on-week, although this increase follows the shortened trading week with the Queen’s Birthday public holiday in all states except Queensland the week prior.

As illustrated in the figure below, the eastern states cattle kill has tracked below 2016 levels for most of this year and remains well below the five-year average. Last week, however, numbers processed moved 7% higher year-on-year.

Furthermore, last week the Eastern Young Cattle Indicator (EYCI) moved below year-ago levels, for the first time since 2014. Historically, prices remain high though and will continue to be supported by tight supplies. At the close of Monday’s markets, the EYCI was 630.25¢/kg cwt – down 17.25¢ year-on-year. 

Lamb

Last week saw eastern states lamb slaughter at its highest since early February, at just over 367,000 head. While the 22% increase on the week prior can be largely attributed to the public holiday break, numbers were also up 30% on last year and 8% on the five-year average. Drying conditions, along with attractive prices, have contributed to the rise in turn-off.

After spending most of the first half of the year tracking well-above 2016 levels, the Eastern States Trade Lamb Indicator’s (ESTLI) year-on-year margin has narrowed considerably in June. Nevertheless, the Indicator remains historically strong. At the close of Monday’s markets, the ESTLI was 645¢/kg cwt – 36¢ dearer than the same time last year.