Key points:
- Eastern states processor competition reflected in price grid increases.
- Trade steer over-the-hook indicator in Victoria reported at record highs.
- Demand for finished cattle remains robust, despite export headwinds.
Over-the-hook (OTH) cattle indicators across the eastern states maintained an upward trajectory during May. The final week of the month was no exception, with trade categories lifting between 7-8¢/kg cwt from the previous week.
Driven by tighter supplies, good rainfall and strong demand from processors, trade steers and heifers across Queensland, NSW and Victoria have increased considerably throughout May. While cow indicators have followed the same trend, softer prices for cow categories were reported in Victoria this week.
In NSW this week, the trade steer indicator (240-260kg, A-C muscle) averaged 577¢/kg carcase weight (cwt), up 9¢ on the week prior and reported at the highest level so far in 2020. In Victoria, the trade steer indicator increased 7¢ from last week to 627¢/kg cwt, the highest level on record. Queensland also witnessed similar weekly increases, but at 589¢/kg cwt, the trade steer indicator remains some way off the highs set earlier in 2020.
Reflecting the demand for productive breeding stock in the state but also manufacturing beef export demand, the NSW heavy cow indicator (300-400kg, A-D) averaged 543¢/kg cwt this week, up 8¢ on last week’s levels and to an all-time high. In Victoria, the heavy cow indicator declined 2¢ from last week at 518¢/kg cwt, as competition from export processors in the state is reported to have eased this week. In Queensland, the OTH heavy cow indicator lifted 7¢/kg cwt on the week prior at 525¢/kg cwt as grids continued to gain momentum.
Adult cattle slaughter in Queensland totalled 67,000 head last week – down 1% from the week prior. In NSW and Victoria however, cattle slaughter lifted 15% and 4% on the week prior to just over 30,000 head and 24,000 head respectively. The tightening availability of finished cattle has seen stronger competition at the physical markets in recent weeks. One large export processor will not be operating this week, citing insufficient supply, and with the arrival of winter finished cattle availability could see a further squeeze. Across all states, OTH indicators are at or approaching record levels and the availability of finished cattle over the coming months will be pivotal to price movements. However, uncertainty and volatility in global markets remain a constant pressure on livestock prices.
© Meat & Livestock Australia Limited, 2020
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