Cattle prices drifted sideways to lower through September under pressure from continued high turnoff and weakening demand. Global beef demand has cooled seasonally, local feedlots are full, processors have as many cattle as they can handle and the Australian dollar is doing us no favours.
This chart shows Australian weekly cattle slaughter. Source: MLA
The lift in restocker demand and the slow-down in turnoff that we anticipated would assist prices has not yet arrived. Seasonal conditions remain mixed, and grazier confidence is low with most preferring to focus on reducing overdrafts rather than taking a punt on the season and cattle prices.
In the north, there are signs that supplies are about to ease. The big lines of uniform cattle are finished for the year and offerings are increasingly comprising of mixed lines as producers look to clean up the tail-end. In the south, there are few cattle with any weight with much of SA and Victoria experiencing a green drought.
Hopefully the recent change in the weather pattern will encourage southern graziers to hang on and convince those in the North to pull the cheque book out and enter the restocker market.
The next few months look challenging from a global perspective. US feedlots have a bubble of front-end cattle supplies they need to work through, and global beef demand is weakening seasonally. Helping to combat the impact of this on local prices will be a slowing in local supplies as the northern season ends and a pick-up in restocker activity from NSW and southern Queensland.
Heavy steers tread water
International beef prices have drifted lower as the northern hemisphere enters a period of seasonally weaker demand during its fall and winter. At the same time, US feedlots have finally decided to bite the bullet and quit their large supply of heavy weight cattle (+120 days on feed). Last week’s US beef production and average cattle slaughter weights were at a year high. The next few months look a little difficult for finished steer producers, but supplies should tighten to help offset the impact on local prices of a period of weakening demand.
This chart shows the national saleyard indicator for heavy steers. Source: MLA
Global finished cattle values look to be under pressure the next few months as US feedlots work through large supplies of heavy weight cattle.
Our local heavy steer values will do well to hold up, although we should soon get a break from large supplies of Queensland bullocks as the northern season winds down and there are few heavy weights in the south.
Cow prices hanging on
Local cow prices have trended sideways through September. While prices for imported lean beef in the US have held up, there are signs of weakness emerging across parts of the US lean beef complex which doesn’t augur well.
Prices for US domestic 85CL boneless beef have collapsed (down to 300USc per lb from a peak of 360USc/lb in mid-July) as has the price of fatty trimmings (80USc per lb vs 160USc per lb at end of July) signalling a slow-down in US food service demand.
This chart shows the national saleyard indicator for processor cows. Source: MLA
There are some worrying signs across the US lean beef complex with prices for US domestic lean manufacturing product easing significantly.
Aussie imported beef prices and local cow values have held up well, though we suspect supply will need to ease to maintain current levels.
US Port Strikes Making New Business Difficult
Another factor that could impact the US market are labour strikes planned for this week for US East coast and Gulf ports where most Australian imported product lands.
Increased buying of nearby supplies ahead of the planned strike on Tuesday has supported values but it is creating issues for new business with freight lines charging another $3000 to 5000 per container for contingencies (diverting to other ports etc.).
Anything that increases the cost of landing Australian product in the US is not good news for producers.
Local feedlots are full
Despite improving feeding margins, demand for feeder steers has waned a little with most feedlots full and little competition from the restocking sector. We should soon start to see restocker competition pickup provided a reasonable Spring and the solid outlook for cattle prices in 2025.
This chart shows the national saleyard indicator for feeder steers. Source: MLA
Expect feeder steer values to continue to trek sideways until graziers decide to re-enter the market and provide some competition to the feedlot sector.
Where is the restocker demand?
Weak restocker demand has been a feature of markets all year with many hamstrung by the collapse in values at the backend of 2023. For much of the year, restocker activity has been almost non-existent as graziers have focussed on reducing the overdraft than take a punt on the season and cattle prices. With signs that spring weather is changing for the better, particularly in northern NSW and southern Queensland, we should see restockers enter markets soon to support prices.
This chart shows the national saleyard indicator for restocker steers. Source: MLA
Restocker demand has been the missing ingredient that cattle markets have been searching for to push prices to a new level.
Even though the southern season is a write-off, most of NSW and southern Queensland has an abundance of feed and restocker activity should pick up and support prices as cash starts to flow from harvest.
From the rail
“In terms of live export, LSS has a boat booked out of Townsville which will start to receive deliveries late this week and which I believe they are fully bought at $3 to $3.10/kg with a few better than that. So that’s slaughter cattle for Vietnam.
“In terms of Indonesia, there’s a lot of activity out of Cloncurry with deliveries mid-month at $2.80/kg for an Indonesia feeder steer. Bulls at $2.80/kg and feeder heifer at $2.30/kg.
“What it suggests is that the NT is running out of weight and there will be a bit of a gap between when the pastoral cattle finish and when they start sourcing stock from the floodplain in December. Some of the shippers are starting to talk about coming back to start sourcing for Indonesia out of Townsville with $3/kg being bandied about. This will be good because we have missed that out of the north and the port of Townsville – gives us something to leverage off.
“In terms of the general market its still strong for heavy cattle, bullocks at $3.30/kg, cows at $2.70/kg and bulls $2.60/kg for 800kg bulls.
“Where we are really struggling is on secondary grade stock with massive discounts applied. At the last sale, bullocks averaged over $3/kg but little steers 200 to 320kg were down to $2.40 to $2.50/kg and if you can handle a heifer you are buying at under $2/kg.”- Scott Mawn, State Livestock Manager, QLD/NT
“Looking forward there appears to be solid numbers through to the end of the month, but the market looks a bit fragile. Anything ready to kill or go to the feeder or backgrounder or ready to join – they’re fine. But if cattle are a step or two away from that you are getting harshly dealt with.
“Last week the job came back about 10c/kg on the market ready stuff, but 50c/kg on the secondary stuff.
“In the live export space, there are positive signs for the wet season. Exporters at $2.80c/kg at Cloncurry puts the price at $3.10/kg Darwin. But if we start to see them buying at $3.10/kg Townsville that sets us up well for the wet as it puts Darwin at around $3.40/kg.” - Paul McCormack, Northern Livestock Manager, Customer Solutions
Queensland saleyard market indicators c/kg lw | ||||
| 2/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 310 | 329 (-19) | 326 (-16) | 205 (+105) |
| Processor cow | 259 | 273 (-14) | 275 (-16) | 144 (+115) |
| Feeder steer | 343 | 346 (-3) | 354 (-11) | 220 (+123) |
| Restocker steer | 359 | 369 (-10) | 363 (-4) | 226 (+139) |
Source: MLA
“Drove up through western NSW over the weekend and there’s a big blanket of feed there. It could do with a rain to freshen it up, but they are in good shape. There’s an enormous body of feed through northern NSW and the Riverina got some rain so hopefully it encourages some restocker interest.”- Peter Homann, National Livestock Manager
“We had up to 30mm through the central Riverina out to Hay and up to Condobolin and down to Tumut. Deniliquin missed out though.
“Around Wagga 100km east and west along the Murray River it’s good.
“Frosting at Ariah Park west of Olympic Way, fair bit of canola being cut, and I saw mowers in the fields over the weekend.
“Good for those wanting to finish stock - there will be plenty of supplementary feed available. And even though there’s a bit of frosting there will still be plenty of grain with feed barley quoted $265/t ex farm Riverina. So good opportunity for those they want to finish stock.”- Rob Inglis, Livestock Production Manager, Victoria/Riverina
NSW saleyard market indicators c/kg lw | ||||
| 2/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 344 | 342 (-2) | 352 (-8) | 195 (+149) |
| Processor cow | 293 | 297 (-4) | 305 (-12) | 125 (+168) |
| Feeder steer | 366 | 366 (n/c) | 386 (-20) | 210 (+156) |
| Restocker steer | 359 | 365 (-6) | 364 (-5) | 214 (+145) |
Source: MLA
“The job has come back a tad in Victoria because we have had a run of short weeks with the AFL Grand Final. There still plenty of stock being moved around but just a bit softer due to large supply and demand down a bit because of short weeks. Back to a 5-day week will help, although there’s a holiday Monday in NSW next week.
“The store job is a bit better up about $100/head but heavy export stuff back 10 to 20c/kg with black feeders back to $4 to 4.10/kg. There’s still reasonable demand.”- Peter Homann, National Livestock Manager
Victoria saleyard market indicators c/kg lw | ||||
| 2/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 362 | 358 (+4) | 373 (-11) | 245 (+117) |
| Processor cow | 296 | 303 (-7) | 316 (-20) | 156 (+140) |
| Feeder steer | 329 | 336 (-7) | 368 (-41) | 219 (+110) |
| Restocker steer | 319 | 327 (-8) | 339 (-20) | 180 (+139) |
Source: MLA
“We’re just in sell-off mode here. Minimal rain over the weekend 4 to 12mm depending on where you are. Comparisons to the 1982 and 1967 droughts. A client of mine at Burra has had less rain than he did in 1967.
“There will be some crop on the Yorke Peninsula, but there’s plenty of crop in the mid-north that won’t reap. We are hoping that we might get a bit of rain to help the crop bulk out so it will provide a bit of stockfeed.” - Damien Webb, Livestock Sales Manager, SA
SA saleyard market indicators c/kg lw | ||||
| 2/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 331 | 343(-12) | 346 (-15) | 227 (+104) |
| Processor cow | 289 | 300 (-11) | 294 (-5) | 160 (+129) |
| Feeder steer | 364 | 309 (+55) | 375 (-11) | 240 (+124) |
| Restocker steer | 299 | 306 (-7) | 387 (+12) | 160 (+139) |
Source: MLA
“Starting to cut hay north and east of Perth. Late getting it in and it has probably only started to grow in the last month so won’t be a big crop. So, it will be down in both quality and quantity. But better than last year.
“Patchy rain through the Kimberley, Pilbara and Gascoyne and a bit down south, but didn’t really get into the wheatbelt like was forecast.
“Starting to cut hay north of Perth, oats and cereal hay $300-390/t.
“Feeder steers $3.20 to $4.10/kg, yearling steers $3.10 to $3.60/kg. Feeder heifers $2.40 to $3.10/kg, yearling heifers $2 to $3.10/kg.
“Plenty of cows starting to roll in from the Gascoyne and Pilbara, pregnancy testing down south so they will start to flow from that holding at $2 to $2.30/kg at yards and at the abattoir $5/kg, dairy cows $4.50/kg at abattoir, bulls $2 to $2.20/kg at yards have come back for the same reasons as the cows, $4.40/kg at abattoir, beef steers $5.60 and heifers $5.40/kg for heavy weights.”-Michael Longford – Livestock Sales Manager, WA
WA saleyard market indicators c/kg lw | ||||
| 2/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 272 | 276 (-4) | 277 (-5) | 214 (+58) |
| Processor cow | 279 | 287 (-8) | 295 (-16) | 139 (+140) |
| Feeder steer | 356 | 355 (+1) | 368 (-12) | 219 (+137) |
| Restocker steer | 358 | 365 (-7) | 364 (-6) | 214 (+144) |
Source: MLA
“We’ve had a torrid month of weather in September with everything but the kitchen sink thrown at us.The big relief particularly for north-west coast and Circular Head producers is the significant rainfalls we’ve had, filling water storages which where desperately low (very unusual for this part of the world).
"Livestock prices have all made solid gains over the month- of note is the many loads a week of processing cattle being shipped across Bass Strait to the two major abattoirs. We seemed to have reached our peak for prime young cattle topping at $7.30/kg and cow beef at $5.80/kg.
"Young cattle back to the paddock with heavy weight steers +400kg’s at $4.20-$4.40/kg and heavy heifers $3.60-3.80/kg, lighter steers have been trading in the $4.50-$5/kg and heifers $3.40-4/kg with Angus and Angus X gaining the top support.” - Gavin Coombe, State Livestock Manager, Tasmania.
Tasmania saleyard market indicators c/kg lw | ||||
| 2/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 337 | 350 (-13) | 340 (-3) | 233 (+104) |
| Processor cow | 266 | 287(-21) | 278 (-22) | 178 (+88) |
Source: MLA
Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.
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