Latest cattle market update

The latest insights and information on the Australian cattle market as of April 2024.

Volatility the order of the day

A full field of buyers (restockers, feedlotters and processors) competed for cattle and markets across the east coast last week, for the first time in months and pushed prices higher, however, trading turned south entering the last week with prices forfeiting hard won gains. Disruptions to processing schedules and price response supply fluctuations have created a significant amount of volatility.  

Providing strong market support were surging US grinding beef prices, the good autumn break received across the eastern states and improving feeding margins. 

A couple of points to note; Western Australian and South Australian livestock values are reflecting the tight seasonal conditions (which is not unusual as both these states have a predominant winter rainfall pattern) in those states.  

Also, most cattle indicators are still lagging well below year ago levels, despite a rise in beef prices since that time. That either indicates that the cattle market was overvalued this time last year or that cattle prices have some ways to run. It’s probably a bit of both, with solid processing margins and the strong outlook for global beef prices likely to sustain the momentum in cattle prices. 

US lean beef prices jump

Underpinning the cow market is a shortage of lean beef in the US as we head toward the US peak demand grilling season. US domestic production is declining as farmers stop liquidating the herd (pull cows out of slaughter mix), while Brazil have hit the quota allocation and are now subject to import tariffs. US imported lean beef prices are nearing the record high of 967Ac/kg and should provide strong support for the Australian beef and cattle index moving forward. The Elders cow market strength index is moving higher, indicating cows are undervalued at saleyards at current prices. 

Graph shows cow indicator versus US beef export price over time.
Graph shows Elders cow market strength index.
Australian cow market indicators c/kg w
  18 April +/- week  +/- month +/- year
90CL cow beef export price952+ 20+ 95 + 97
 QLD384 - 68 - 42 - 128
 NSW 416 - 66 - 2 - 66
 VIC 434 - 74 + 8 - 136
 TAS 268 - 90 - 24 - 200
 SA 448 - 46+ 24 - 146
 WA 352 + 10 + 24 - 96

Table shows Australian cow market indicators. Source: MLA

North Asian prices to be helped by lift in US grinding beef sector

Heavy steer prices have enjoyed a strong month, despite the north Asian beef export price indictor being flat. Supressing these prices is the heavy numbers of market ready cattle in US feedlots. These values should soon get a boost from demand for round cuts from the processing sector looking to fill the void in US lean beef supplies. Also, we are heading towards the peak beef demand season in the US. This should flow into higher prices for US boxed beef and in turn higher prices in north Asian export markets. 

It will be interesting to watch US fed beef prices over the next month or two as they will need to lift to sustain current Australian heavy steer values. The Elders export cattle market strength indicator is in a neutral state indicating balance between export market prices and local cattle values.  

Graph shows heavy steers versus export price.
Graph shows Elders export cattle strength index.
Australian heavy steer market indicators c/kg lw
  18 April  +/- week  +/- month +/- year
 North Asian export indicator price c/kg1001+ 11- 5 + 74
 QLD259 - 13 - 5 - 48
 NSW 282 - 22 - 19 - 47
 VIC 304 - 20 + 30 - 57
 TAS 240+ 28+ 25 - 61
 SA 296 - 24+ 18 - 85
 WA 196- 11 - 23 - 119

Table shows Australian heavy steer market indicators. Source: MLA

EYCI strength bringing feeders to market

The Eastern Young Cattle Index (EYCI) performed strongly the past month, lifting 49c/kg to 626c/kg cw or 7.8 per cent before falling this past week. Feedlotters are eyeing better values for cattle fed for the domestic market and the chance to average down feed costs with the ability to secure cheaper grain compared to what they have been using since last spring. A good sign is that the EYCI has been improving despite increased availability in recent weeks.

Graph shows EYCI versus head.
Graph shows EYCI momentum indicators.
EYCI c/kg cw
  18 April  +/- week  +/- month +/- year
 QLD610 - 23+ 5 - 73
 NSW 584 - 40 + 23 - 102
 VIC 557 - 23 + 81 - 142
 SA548n/c+ 87 - 150
 WA378- 66 - 66 - 323

Table shows EYCI c/kg cw. Source: MLA

Seasonal concerns limits restocker demand

The good autumn break across most of the east coast encouraged some restocker interest in recent weeks, however, buying was curtailed as temperatures start to fall and feed growth slows. This can be seen in the easing of the Elders restocker strength index in recent weeks. The restocker index was 6c/kg down for the week but 5c/kg higher for the month.

Map shows Australian rainfall for the fortnight ending 14 April 2024. Source: BOM.
Graph shows Elders restocker strength index.
Restocker steer indicator c/kg lw
  18 April +/- week  +/- month +/- year
 Aust342- 6+ 5 - 59
 QLD346 - 6n/c - 57
 NSW 334 - 12+ 34 - 47
 VIC 280 + 12 + 19 - 68
 SA 257 - 23+ 11 - 108
 WA 221n/c+ 51 - 83

Table shows restocker steer indicator. Source: MLA

Cattle kill running at a solid clip

Slaughter in NSW and QLD is running well above the 5 year average suggesting that processors are not having to look too hard for cattle. Slaughter ready cattle availability across NSW and VIC should start to ease seasonally the next few months but the northern cattle turn-off will start to ramp up as the northern wet season ends. The ready availability of cattle and the capacity of local processors will play a key role in the direction of prices the next few months.

Graph shows weekly cattle kill in Australia, for 2023, 2024 and a five year average.

Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.

The information contained in this article is given for the purpose of providing general information only, and while Elders has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and Elders assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this article, please contact Elders.

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