Analysts, producers and agents have their say on cattle prices
As cattle sell at prices producers have never seen before, a leading beef industry analyst predicts they could go even higher. Here is his detailed price forecast — including when feeder cattle prices might peak.
UPDATE: FEEDER steer prices are predicted to climb in the coming weeks, even higher than the current lofty rates, according to leading beef industry analyst Simon Quilty.
With rates of around 410c/kg now being paid for feeders, Mr Quilty had predicted prices to peak this month at 440c/kg.
He told The Weekly Times this week this was still likely to come to fruition, within weeks.
“I might be out by a couple of weeks, it could be into early next month,” he said.
“Come late October or November I think all categories will be close to their peak.”
Sky-high prices cattle prices have been described in the past week as “unbelievable” and “scary” by sellers and buyers, as grass fever drives bids into uncharted territory.
The cattle market has been described as the best in 50 years.
Compelled forward by a magnificent La Nina spring pastures in many southern areas, and herd rebuilding in northern Australia, the Eastern States Young Cattle Indicator is now in lofty territory officially hitting a record 795c/kg carcass weight late last week.
Mr Quilty said the peak was nearing, and cautioned a two-speed economic rebuild from COVID-19 would weigh on protein-importing nations in coming years.
Yet, he is not predicting a major correction, but an easing for many categories.
He said the good spring was likely to see producers hold cattle a little longer than expected to allow them to gain weight, and then “good numbers with maximum weight would come forward in November”.
“Next year I think all categories of vealers will do the best, a price correction is coming for feeder steers and also heavy steers,” he said.
Even if price corrections of around 10c/kg occurred next year, Mr Quilty said “producers will still be very happy with these numbers”.
Last week the price momentum was felt in Hamilton where restockers went head-to-head to secure stock last week. There, five pens of heavy steers broke the $2000 per head mark.
LMB auctioneer Bernie Grant said he had never seen prices sustain at such high levels, and then increase again. And Sam Savin from Nutrien-Savin Livestock Marketing said the unbelievable prices “felt like the demand is so strong we could sell cattle on the moon”.
He quoted rates of 405-412c/kg for steers over 500kg liveweight, up to 440c/kg for steers 400-450kg while it was “impossible to buy little steers under 500c/kg”.
Branxholme vendor Geoff McErvale said he had never seen prices like it before.
But buyer Jamie Eccles, Warrnambool, who bought Angus steers to background for feedlots, weighing 400kg for around 435c/kg, said the prices were “scary”.
“At Hamilton they were 20c/kg dearer than other recent markets; it is a bit scary but (buying to background) is what we do, we just hope it stays good, but nobody can guarantee me that it will.”
At Mount Gambier, just over the South Australian border, Elders livestock manager David Creek described that centre’s sale as the dearest in 50 years.
Lighter cattle made up to 800c/kg at the Mt Gambier, pushed by the confidence of locals. While heavier lines still made a respectable 420c/kg-450c/kg for steers weighing about 450kg, it was at the light end of the market where prices exploded.
And at Yea a “dizzyingly high” market last week saw heavy cattle returned around 420c/kg to 430c/kg.
Mr Quilty is forecasting prices for most categories will peak during November before easing. He is tipping vealers, now trading at 422c/kg could go closer to 458c/kg.
Heavy feeder steers were now paying around 378c/kg and Mr Quilty tipped they would top at 382c/kg — a price he predicted a year ago — within coming weeks.
His EYCI prediction of 850c/kg, “might struggle unless the currency drifts lower”, he said, but he was still backing it to fetch 820c/kg-830c/kg cwt in November before backing off.
Mr Savin said the outlook for cattle prices should remain strong given that females were still selling to fatten and then kill.
MORE
SHARP INCREASE IN RAM AVERAGES
Biden win lifts hopes for Aussie red-meat exports
Will a change in US presidency affect Australia’s relations with China? The red meat industry could benefit from Biden’s win, as tensions with China increase. Here’s what we know.
Northern state drives cattle price gains
Queenslanders are paying up to 100c/kg more for young cattle than what Victorian producers are handing out, as the northern wet season looms. How far this factor will push prices is in question.