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Cattle prices strengthen due to combination of factors

Livestock producer confidence is described as the strongest it’s been in decades. It’s all thanks to a unique combination of factors.

Prices for store heifers and steers have been strong at Pakenham. Pat Clark and Neil Schalken from Healesville sold 20 young, six-and-a-half month-old steers at 320kg, for $1800, last week. Picture: Chloe Smith
Prices for store heifers and steers have been strong at Pakenham. Pat Clark and Neil Schalken from Healesville sold 20 young, six-and-a-half month-old steers at 320kg, for $1800, last week. Picture: Chloe Smith

VERY low supplies had the cattle industry basking in big money results over the Easter period.

A combination of soaking rainfall events and public holidays reduced cattle numbers in saleyards and online, causing prices to strengthen again.

Cows and calves sold to $4125 and averaged $3422 on AuctionsPlus before Easter, as demand

for breeding stock surged again, some female categories showing rises of $50 to $300 per head.

It comes as stock agents describe confidence among producers as the strongest seen in decades as they enjoy consistent run of high commodity prices and the safety net of a good season and stored grain and hay.

Elders southern regional livestock manager Matt Tinkler said there was “general excitement for agriculture, a real optimistic vibe and confidence we probably haven’t seen for a good 15 to 20 years”.

Behind the current spate of high prices is very tight supplies as producers take advantage of early autumn feed, while flooding in some areas has exaggerated the trend as stock transport has been disrupted.

There were just 5500 young cattle included in the Eastern Young Cattle Indicator when it hit its recent record, which is the lowest number seen in a daily calculation since July 2018, according to Meat and Livestock Australia.

While cattle listings on AuctionsPlus fell by 42 per cent to just 10,650 in the week prior to Easter, easily the lowest number seen on the platform this year.

Against this backdrop of unusually low supplies, market analysts have now began forecasting how the market could perform in the weeks ahead.

And opinions are divided.

Global AgriTrends Down Under meat trader and general manager Simon Quilty, predicted

price falls for cattle going forward, basing this on his analysis that the ‘deep rebuild’ phase of

Australia’s herd has finished and more normal supply patterns will start to emerge.

“What the figures show is that by June to July we will be back in a regular rebuild pattern and that extreme tightness of numbers will dissipate,’’ Mr Quilty said.

His latest prediction is that feeder steer prices will ease to around 400c/kg by June.

Mr Tinkler’s view is more optimistic, and based around the good season continuing to give producers options and support prices. But he did acknowledge that the processing sector was under pressure from tight margins to losses from Australia’s high beef price point.

“From a producers perspective it all looks positive around tight livestock numbers and feed, but no- one is blind to the fact there doesn’t appear to be a lot of margin in it for processors,’’ Mr Tinkler said.

“The risk going forward is that the sheer lack of supply could see processors cut kill days (this winter).’’

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Original URL: https://www.weeklytimesnow.com.au/agribusiness/livestock/cattle-prices-strengthen-due-to-combination-of-factors/news-story/5419d4700ff3c829bffea7354224a6fb