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Restocker intent starting to show

13 February 2020

Key points:

  • Yardings in New South Wales and Queensland fell this week with New South Wales seeing the biggest drop at 28%
  • The medium cow indicator reached a record high in New South Wales and Queensland
  • The US 90CL indicator dropped this week back toward the five-year average.

Cattle prices across all specifications continued to find support this week, rising following further rainfall and reduced yardings. Feeder steers have been in high demand, as lot feeders and restockers, particularly in areas where the impact of rain has already started to show, make clear their intent to secure cattle. However, productive cattle, in limited numbers given the high breeding turnoff in the last year, have seen noticeable price rises.

There can be no question the cattle market is encouraged, evidenced with the recent price movements and with favourable conditions forecast for the south this week. The market could find further support, especially for breeding stock as producers with improved feed availability look to restock paddocks.

Yardings

For the week ending 7 February national cattle yardings totalled 55,158 head, a decrease of 11.4% year on year. Queensland saw the biggest decline in numbers, easing 22% (or 6,406 head) from year ago levels to 22,348 head. In New South Wales, numbers totalled 11,972 head, down 28% on the same week in 2019. Victoria yardings increased 23% to 13,309 head year-on-year.

Saleyard yardings compared to last week:                             

New South Wales:

  • Wagga: up 8.5% to 6,309 head
  • Tamworth: back 34% to 835 head
  • Gunnedah: back 39% to 845 head

Queensland:

  • Roma: back 38% to 1,927 head
  • Toowoomba: back 89% to 64 head
  • Gracemere: back 58% to 1,369 head

Victoria:

  • Mortlake: back 55% to 409 head
  • Leongatha: up 51% to 2,725 head
  • Shepparton: up 18% to 2,000 head

Prices

Cattle prices responded to the rainfall and the drop in yardings, with prices for female cattle lifting sharply. In Queensland, yearling heifers averaged 347¢/kg live weight (lwt), 58% above year-ago levels and 10% higher compared to the week prior, followed closely by New South Wales at 342¢/kg lwt, a 56% increase year-on-year.

New South Wales grown heifers were reported at a 12¢ premium to their Queensland counterparts, improving 64% on year-ago levels to finish at 324¢/kg lwt for the week ending 14 February. Unsurprisingly, female cattle prices are nearing the highs last seen in 2016, on the back of high demand, following the record levels of female slaughter seen throughout 2019.

Average C2 yearling prices to restockers - 200-280/280-330kg lwt:

New South Wales:

  • Tamworth: Yearling steers averaged 416¢/kg, up 74¢
    Yearling heifers averaged 362¢/kg, up 33¢
  • Wagga: yearling steers averaged 372¢/kg, up 39¢
    Yearling heifers averaged 322¢/kg, up 14¢
  • Inverell: Yearling steers averaged 383¢/kg, up 60¢
    Yearling heifers averaged 335¢/kg, up 10¢

Queensland:

  • Toowoomba: yearling steers averaged 364¢/kg, up 32¢
    Yearling heifers averaged 338¢/kg, up 29¢
  • Roma Store: yearling steers averaged 382¢/kg, up 13¢
    Yearling heifers averaged 350¢/kg, up 19¢
  • Warwick: yearling steers averaged 397¢/kg, up 38¢
    Yearling heifers averaged 344¢/kg, up 22¢

The medium cow indicator has also gained momentum, reaching record highs. The New South Wales medium cow indicator improved 79% year-on-year to reach 291¢/kg, with the Queensland indicator following suit, tracking 62% above last year, to finish at 282¢/kg lwt.

This week also saw the medium cow indicator, on a carcase weight basis, close in on the US 90CL indicator, a reflection of both domestic price rises and uncertainty in the trade surrounding short-term demand in China. In December, the average spread between the respective indicators was 456¢/kg carcase weight (cwt). However, driven by the aforementioned factors, to date in February, the 90CL indicator sits at a 196¢/kg cwt premium to the national medium cow indicator – back in line with the five-year average of 193¢/kg cwt. 

Cattle supplies are anticipated to tighten to a greater extent in the areas which have received some good rainfall, in particular for young cattle and breeding stock. Producers will be looking towards their Autumn prospects and processors will be assessing supply and the situation in China - in the event of further widespread rain and China demand returning to late 2019 levels, the competition for cows could drive domestic and import prices higher.

US-90CL-med-cow-1.jpg

© Meat & Livestock Australia Limited, 2020

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