Grainfed indicators within touching distance

The Queensland 70 day grainfed steer price has continued to narrow its margin on the 100 day price. The week ending 5 March over-the-hooks (OTH) quotes have the 70 day grainfed price at 676¢/kg cwt, with the 100 day price currently sitting just above at 678¢/kg cwt. The 2020 average margin was 10¢/kg cwt. 

These 70 day and 100 day grainfed products are typically destined for the domestic and export market, respectively. While both indicators have eased back in line with softening cattle prices since record highs in the last fortnight, the impacts of high AUD, high domestic cattle prices and international COVID-19 restrictions, continue to have an impact on Australia’s ability to export beef into foodservice channels in key markets. A higher supply of beef is therefore being pushed into domestic channels in order to sell, holding up price for lighter product in comparison to heavier product.

On top of the aforementioned factors, Australia’s herd rebuild is leading to lower slaughter volumes, which continues to reduce volumes available for export. This is inadvertently placing upward pressure on domestic prices given low supply, and is expected to continue until herd numbers ramp up. Eastern states slaughter for the week ending 26 February totalled 100,875 head, 15% below year-ago levels. 

© Meat & Livestock Australia Limited, 2021