Medium cow indicator trading above year-ago levels

The medium cow indicator was reported at 209.5¢/kg lwt on Tuesday, 7¢ above year-ago levels, with global dynamics continuing to support Australian cow prices. However, current conditions will likely continue to limit any significant upside, given the sustained high output of cows through saleyards as well as directly to processors.

So far in September, 51% of medium cows have been sold through NSW saleyards, followed by 44% in Queensland and only 5% in Victoria, with almost all sales going to processors. Although elevated  female turnoff in 2018 suggested a reduction in supply for 2019, the throughput of cows in the eastern states has increased 60% from the same period last year as many producers, particularly in NSW continue to destock.

Looking to Victoria, cows sold in the first 3 weeks of September have averaged 243¢/kg lwt, an increase of 30¢ from the same period last year. Due to the small numbers of cows yarded throughout the state, Victorian cows have been operating at an average premium of 40¢ to Queensland and 15¢ to NSW. NSW cow prices have also improved year-on-year, up 9¢ to average 228¢/kg lwt. Due to increased interest from southern buyers, cows sold in NSW have been trading at a 25¢ premium to Queensland. Queensland cow prices have declined 18¢ from 2018, averaging 202¢/kg lwt.

For the week ending 20 September, eastern states cattle slaughter totalled 153,100 head, up 5% on year-ago levels. Queensland was the largest contributor, accounting for 52% or 80,100 cattle processed, an increase of 3% year-on-year, while NSW increased 10% from the corresponding week in 2018 and contributed 24% of cattle (37,300 head). Victoria supplied 18% of eastern states throughput, at 27,000 head, up 8% on year-ago levels.

*medium cows are classified as D3, weighing 400-520kg

© Meat & Livestock Australia Limited, 2019