Cattle prices have been pressured lower through October as the dry start to spring encouraged continued large turnoff. Feedlots are full and processors have as many cattle as they can handle and with restocker demand remaining subdued there was only one way for prices to go.
This chart shows weekly cattle slaughter levels for 2024 vs 2023 and the 5-year average. Source: NLRS.
Australian cattle values have been dragged lower by heavy supplies that have shown little sign of abating since the start of 2024 with recent heavy slaughter levels nudging up against processing capacity.
A lift in processing capacity by a major Qld abattoir will aid in limiting the price impact of heavy supply.
The commencement of harvest and some widespread storm activity in the past few weeks across southern areas has acted to slow supply allowing prices to stabilise, while across the north, live exporters have moved into Queensland to fill orders as supplies of NT pastoral cattle have dried up. This will help take some pressure of southern feeder and slaughter markets.
International beef demand remains solid. US fed beef prices have risen counter seasonally through October despite US feedlotters moving to market their large supplies of heavy feedlot cattle (average US carcase weights have reached year highs through October). The imported lean beef market remains strongly bid as US cow kills remain well below long-term averages (down 18 per cent (pc) on last yr and down 30 pc on 2 years ago).
Australian continues to export at historically high levels with a consequence that we are likely to trigger safeguard levels on exports to China and Korea during November. In years previously, when we have triggered the safeguard, it has had minimal impact on our beef trade or cattle values.
Looking ahead, the outlook appears balanced. Local supplies should tighten up as the northern season wraps up and focus shifts to the south. Southern restockers should become more active as harvest cash flows encourage mixed farmers to take a punt on relatively cheap store stock. Internationally, the US shows no signs of easing fed beef production with cattle on feed placements in September bringing feedlot numbers in line with last year as drought conditions linger across the US southern plains. Also, competition from South American beef in the US will increase from early next year as cheap bonded South America lean beef floods the US market.
As a vote of confidence in the industry, Beef Central has said that “JBS Swift has announced that they have commenced a second shift at its Dinmore, Queensland, abattoir with plans to get back to full working capacity by January next year.”
This has been a massive undertaking involving training and housing around 700 meatworkers and has been 12 months in the making and comes hot on the heels of the 3,000 per head Murray Bridge plant opening. The expansion in Australian processing capacity should allow kill levels to lift above 140,000 head per week that has constrained the industry and cattle prices through 2024.
Heavy steers tread water
As we suggested last month, heavy steer values came under pressure during October, but not for the reasons we expected. US fed beef prices improved counter cyclically during October despite heavy turnoff out of US feedlots (partly a result of the strengthening US economy), aiding local processing margins. However, processors were well supplied with good heavy steers and did not have to compete too hard for supply which worked against prices with booking space a little hard to find.
This chart shows the national saleyard heavy steer price c/kg lw in 2024 vs 2023 and 5 year average. Source: MLA.
Heavy supply has pressured export steer values through October as processors have not had to compete too hard to fill kill schedules.
Finished steer prices have been aided by a kick in US fed beef prices.
Our cattle prices should benefit from an expansion in local processor capacity as labour shortages ease and new facilities come online.
There are thoughts that processing schedules may include some phantom bookings while recent storm rain across the east coast may act to reduce the flow of cattle into year’s end and support cattle values.
Prolonged drought across the US southern plains has encouraged higher placements into US feedlots the past couple of months and is delaying US herd rebuilding. At this stage there are no signs of US feedlot beef production easing, and we can expect solid US beef production levels until at least through the first quarter of 2025.
This chart shows the number of US cattle on feed (‘000 head) in 2024 vs 2023. Source: USDA.
Drought across the US southern plains has delayed the start of US herd rebuilding by pushing heifers into feedlots.
At this stage there are no signs of US feedlot beef production easing, and we can expect solid competition at least through the first quarter of 2025.
Cow prices hang on
Despite solid competition from South American and New Zealand lean beef, imported Australian manufacturing beef is well bid into the US market. US cow kills remain well down as US herd liquidation has ended which is supporting values across the entire US lean beef complex. US domestic 90CL lean beef is still maintaining a 17 pc premium over imported frozen 90CL beef.
This chart shows the national saleyard processor cow price c/kg lw in 2024 vs 2023 and 5 year average. Source: MLA.
Cow values look to be well supported by the US imported manufacturing market for the remainder of 2024.
Expect a lift in South American competition through Q1 2025 as tariff free South American beef comes out of bond.
This has the potential to impact US imported lean beef prices and potentially our cow values through early 2025.
Imported lean beef prices in the US market remain at historically high levels and have supported Australian cow prices through much of 2024. Australian exporters can expect a pick-up in South American competition through the first quarter of 2025 as they gain access to tariff free quota for 2025. Currently, South American exporters are paying a 26.4 pc quota on beef exports to the US.
This chart shows US imported lean beef prices (USc/lb). Source: Steiner Group.
Indonesian live exporters active in Qld
Elders’ agents are reporting that Indonesian live exporters been actively sourcing cattle out of Cloncurry and Charters Towers to fill boats.
A couple of vessels will be loaded out of Townsville in coming weeks while cattle sourced out of Cloncurry will be trucked to Darwin for export.
This flurry of activity is to execute shipments before mid-December so cattle can be fed in Indonesia to be ready for the peak demand during Ramadan in mid-March.
Pastoral cattle supply out of the NT has been exhausted and the floodplain cattle are not yet ready. These live export orders will help to take some pressure off the Qld feeder and slaughter markets.
Local feedlots are full
Feedlots remain well supplied with cattle and feeder steer values have been under pressure during October with Angus type black cattle suffering the heaviest falls, reducing their premium over standard flat-back type cattle. Angus feeder steer values delivered into Downs feedlots have fallen to $3.70 to 3.80 per kg down from $4 to 4.20 per kg in recent months.
There are reports that the odd spot load of cottonseed is being delivered to Queensland backgrounders as conditions deteriorate in areas of Queensland that have not been lucky enough to get under some storms. This may explain some of the pressure on southern feeder markets.
Many Australian feedlots are operating at capacity and have limited ability to expand capacity. With the Chinese market remaining subdued it is becoming increasingly difficult for feedlotters to extract premiums for Angus and F1 Wagyu cattle.
Some agents have noted that if the feeder steer price falls much further some producers across NSW and southern Queensland with plenty of feed may decide to finish cattle on grass.
This chart shows the national saleyard indicator for feeder steers. Source: MLA.
Weakness in the Asian premium beef market is making it difficult to extract feeding premiums for Angus and F1 Wagyu cattle, resulting in a narrowing of feeder steer premiums for these cattle.
Overall, the feeder steer market remains under pressure as many feedlotters are at capacity.
Prices will be supported by producers deciding to finish cattle on grass rather than except lower feeder steer values.
Hint of restocker demand
Store cattle prices have stabilised as harvest and storms across parts of the east coast have slowed turn-off and piqued some belated restocker interest. As cash balances are restored by harvest, we expect a lift in restocker interest across southern Queensland and NSW to support prices heading into the end of the year. The strength of restocker demand will be determined by the extent of rainfall over the northern wet season
This chart shows the national saleyard indicator for restocker steers in c/kg lw for 2024 vs 2023 and 5 year average. Source: MLA.
There has been a hint of improved restocker demand in the past couple of weeks.
Weather seems to be in the process of shifting to a northern wet season pattern with storm activity across northern Australia and the east coast.
A good follow-up rain could ignite restocker demand as farmers look to parlay their cropping return through cheap store cattle purchases.
From the rail
Read what Elders livestock representatives from around Australia are saying about the markets in their regions.
“All classes of cattle in the Charter's Towns sale, a little bit stronger, despite quality dropping off with hot dry conditions. The sale saw solid demand with all export works operating with the addition of a live exporter keeping the market ticking over nicely. The lighter end of the market was a bit stronger as well, which is a positive change. Still not adding up to much money, but positive all the same.
“We're in the transition to floodplain cattle season in the NT. That's taken the job for Brahman feeders 280 to 380kg which was building up to $3.20 to $3.30/kg lw Darwin to $3.40/kg lw with potential upside for cattle delivered in December.
“There's some risk in it. They are targeting the Ramadan religious festival at the end of March. Usual feeding period up there is 90 to 100 days, so to make the peak demand period, cattle need to be up there by about the 15 December. So that's probably 20 days earlier than optimal for the guys that are turning cattle off the floodplain. But I think the price will compensate for any loss of production.
“Boats are active out of Townsville, both for Indonesian feeder and Vietnam slaughter markets which is helping to absorb some cattle supply and take pressure of Queensland feeder and slaughter markets.” - Paul McCormack, Elders Livestock Manager Customer Solutions, QLD/NT
“The feeder job is sitting at $3.50 to $3.70/kg lw, depending on who you talk to. They're saying they have got plenty of cattle booked forward, but there are gaps.
“The rest of the job, a lot of secondary cattle starting to come forward as, as normally happens this time of year and condition coming off cattle rapidly. We badly need rain across a fair bit of Queensland. We did get some relief last week in certain areas. But you can only ever expect storm rain in October.
“The market is accordingly on stores. It's starting to ease and there some opportunities, as there have been pretty much all year when you can buy stores under what your feeders are making. But still decided a lack of confidence in the grazing sector. They're not exactly breaking down the door to buy cattle.” - Andrew Scott, Elders Livestock Account Manager, QLD/NT
Queensland saleyard market indicators c/kg lw | ||||
| 30/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 312 | 307 (+5) | 328 (-16) | 185 (+127) |
| Processor cow | 259 | 244 (+15) | 271 (-12) | 147 (+112) |
| Feeder steer | 343 | 334 (+9) | 354 (-11) | 206 (+137) |
| Restocker steer | 358 | 351 (+7) | 362 (-4) | 224 (+134) |
Source: MLA
“On the cattle front, the kill and prices seem to have found a bit of a level. MSA grass cattle earning from $6.50 to $7.00/kg dw at the top.
“Processors are still saying they've got space bookings out into January. I think the cow job seems to have found a level at $2.80 to $2.90/kg lw on the physical market which is still in front of what most of them are quoting to hook them.
“On feeders, blacks are somewhere around that $3.80 to $3.90/kg lw if you ask the right question in the right spot. Your standard British bred feeders are anywhere from $3.50 to $3.60/kg lw.” - Nic Hannaford, Elders State Livestock Manager, NSW
NSW saleyard market indicators c/kg lw | ||||
| 30/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 330 | 334 (-4) | 342 (-12) | 205 (+125) |
| Processor cow | 271 | 272 (-1) | 294 (-23) | 161 (+110) |
| Feeder steer | 343 | 342 (+1) | 366 (-20) | 206 (+137) |
| Restocker steer | 350 | 350 (n/c) | 361 (-11) | 208 (+142) |
Source: MLA
“Just spoke to one of my contacts, and they said they were booking cows at $6 per kg dw delivered Victorian processor mid-December to mid-January, grass cows just 250kg plus. So, the Victorian cattle job looks as if it’s going to be firm over Christmas and New Year.” - Peter Homann, Elders National Livestock Manager
Victoria saleyard market indicators c/kg lw | ||||
| 30/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 337 | 336 (+1) | 358 (-21) | 215 (+122) |
| Processor cow | 275 | 277 (+2) | 303 (-28) | 176 (+99) |
| Feeder steer | 326 | 320 (+6) | 336 (-10) | 206 (+120) |
| Restocker steer | 299 | 287 (+11) | 327 (-28) | 196 (+103) |
Source: MLA
“The cattle job has eased on grassfed. Cattle are $7 to $7.20/kg dw at the abattoir for the very best, cows at $5.80 to $6/kg dw on the top end, feeder job has come back to $3.60 to $3.80/kg lw best blacks. At the store sale Naracoorte last week, the very best black steers that were renowned and had a bit of reputation made $4 to $4.30/kg lw, but for very, very selected pens. The bulk of all steers were $3.60 to $3.80/kg lw blacks and $3.20 to $3.40/kg lw colours.
“The very best heifers were up to $3.30/kg lw, but most were sort of that $3 to $3.20/kg lw and then coloured the heifers were $2.60 to $3/kg lw at best.
“The season is now kicking along beautifully after that big rain in the lower end of the state. It's been a lifeline for them. No pressure on those guys to rush on livestock sales now.” - Laryn Gogel, Elders Livestock Sales Manager, SA
SA saleyard market indicators c/kg lw | ||||
| 30/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 319 | 327 (-8) | 309 (+10) | 219 (+100) |
| Processor cow | 266 | 275 (-9) | 300 (-34) | 173 (+93) |
| Feeder steer | 285 | 304 (-19) | 344 (-69) | 195 (+90) |
| Restocker steer | 257 | 289 (-32) | 306 (-49) | 178 (+78) |
Source: MLA
“Slaughter job back a bit with abattoirs being booked out till early next year. Cows $5/kg dw back to $4.40 to $4.60/kg dw. We are still working through our spring bookings and still got pastoral cows coming from north of Perth due to unseasonal rain out there in September and October.
“A lot of hay has been dropped down south of Perth now and around the Great Southern region. Our prices haven't changed too much on the feeder side, but at the abattoirs, basically all export cattle in boxes have come back $0.30 to $0.40/kg dw in the last three weeks.
“Everyone's full and they are having trouble moving meat on the market overseas. Abattoirs are basically booked right for December and into early January. It's been a bit challenging. I still don't know how many phantom bookings there might be in December.” - Michael Longford, Elders Livestock Sales Manager, WA
WA saleyard market indicators c/kg lw | ||||
| 30/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 265 | 264 (+1) | 228 (+37) | 186 (+79) |
| Processor cow | 198 | 203 (-5) | 210 (-12) | 130 (+68) |
| Feeder steer | 343 | 319 (+24) | 320 (+23) | 240 (+103) |
Source: MLA
“The weather in Tassie has been the limiting factor with cool overcast conditions over much of the state suppressing true spring growth with nearly all producers wanting to fill hay barns and silage stacks.
“This has taken the edge off the restocker cattle market. Heavier steers have generally pulled back to $3.60 to $3.90/kg lw from over $4/kg lw, whilst the female heavier end trading around $3.20 to $3.60/kg lw, with this category attracting the best demand as it has for most of this year.
“Better type yearlings and blacks have been trading in a wide range from $3.80 to $4.50/kg lw with many runs of these cattle presenting in light store type condition, the effects of a poor first six months of the year. The heifer end has been by far the best buying, trading anywhere from $2.70 to $3.60/kg lw.
“Our processors struggled through October to find supply with many loads coming from across the Strait to top-up kills with one processor still only working 4-day weeks which has maintained price stability. Program yearlings seem to be the sweet spot around $7.30/kg dw and heavy cows $6 to $6.20/kg dw with lighter types around $5.50/kg dw.” - Gavin Coombe, State Livestock Manager, Tasmania
Tasmania saleyard market indicators c/kg lw | ||||
| 30/10/2024 | +/- week | +/1 month | +/- year | |
| Heavy steer | 301 | 333 (-32) | 350 (-49) | 210 (+91) |
| Processor cow | 237 | 281 (-44) | 287 (-50) | 180 (+57) |
Source: MLA
Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.
*Disclaimer – important, please read:
The information contained in this article is given for general information purposes only, current at the time of first publication, and does not constitute professional advice. The article has been independently created by a human author using some degree of creativity through consultation with various third-party sources. Third party information has been sourced from means which Elders consider to be reliable. However, Elders has not independently verified the information and cannot guarantee its accuracy. Links or references to third party sources are provided for convenience only and do not constitute endorsement of material by third parties or any associated product or service offering. While Elders has exercised reasonable care, skill and diligence in preparation of this article, many factors including environmental/seasonal factors and market conditions can impact its accuracy and currency. The information should not be relied upon under any circumstances and, to the extent permitted by law, Elders disclaim liability for any loss or damage arising out of any reliance upon the information contained in this article. If you would like to speak to someone for tailored advice specific to your circumstances relating to any of the matters referred to in this article, please contact Elders.