Cattle update – July 2024

Cattle prices start to turn higher

Despite a continuation of heavy slaughter (+ 15 per cent vs 2023 and + 12 per cent on 5 year average), prices for slaughter ready cattle have started to turn higher entering July. Export beef prices have risen through the peak demand period (the northern hemisphere summer) and as competition falls in Australia’s major beef export markets. This, combined with a tightening in supplies of slaughter ready cattle in the south, has seen southern processors active in northern markets, providing increased processor competition allowing prices to firm.

US beef exports during May were the lowest May exports in 4 years, continuing the trend of weaker US exports. Since peaking in 2022, US beef exports have fallen by 25 to 30 per cent in our key north Asian export markets. 

Falls in US beef exports have coincided with US beef cattle prices diverging from Australian cattle prices, rendering US beef less competitive in export markets. 

While export market conditions and processing margins have been largely positive over the last quarter, processors have not had to compete too hard for cattle. However, over the past few weeks, southern processors have been increasingly active in northern markets as the availability of slaughter ready cattle in the south eases seasonally. Increased processor competition has allowed prices for slaughter ready cattle to firm. 

Strong processing margins lift cow values

Export prices for Australian beef in the US have been on the rise during June. US lean beef supplies are down 20 per cent owing to declining cow slaughter, while New Zealand supplies are shrinking seasonally, and Brazilian exports are a fraction of earlier levels being subject to the US out-of-quota tariff of 26.4 per cent.

Stronger processing margins have allowed local prices to rise despite continued higher cow slaughter levels.

Australian cow market indicators c/kg lw

The table shows the cow saleyard indicator price for each state against last week, last month and last year. Source: MLA.

Good signs for heavy export cattle

While US feedlots remain well supplied with market ready cattle, US fed beef prices have been rising the past month leading into the seasonal peak in US demand around the 4 July Independence Day Holiday. Normally, US fed beef values start to ease seasonally towards the back end of northern hemisphere summer into autumn as demand for higher value grilling items starts to fall. 

Australia will be looking to demand from north Asian markets to support prices over the next few months. Lower competition from US beef in north Asia is assisting Australian beef export values and finished cattle values. 

Recently China issued a new export license to an Australian abattoir – Australian Meat Group (AMG) Dandenong. The first new license issued to an Australian plant since 2017. According to Beef Central, the AMG Dandenong plant “kills quality chilled and frozen grain and grassfed beef, cold-boned, for domestic and export markets. Most of the product goes into retail or food service sectors.”

Australian heavy steer market indicators c/kg lw

The table shows the heavy weight steer saleyard indicator price for each state against last week, last month and last year. Source: MLA.

Young cattle prices move above year ago levels

In line with export markets, domestic trade and feeder cattle values have begun to improve. Assisting the improvement in demand has been an easing in grain prices which have fallen some $60/tonne or around 15 per cent. Improving cattle feeding margins have supported feeder cattle values and provided some competition for processors on domestic trade cattle.

EYCI c/kg cw

The table shows the EYCI (QLD, NSW, VIC) and the feeder steer (SA&WA) saleyard indicator price for each state against last week, last month and last year. Source: MLA.

Restocker cattle prices are cheap

Restocker cattle values haven’t followed finished cattle values higher to the same degree. Good general rain across western NSW and QLD should start to slow supply and increase demand for restocker cattle.

Restocker steer indicator c/kg lw

The table shows the restocker steer saleyard indicator price for each state against last week, last month and last year. Source: MLA.