EYCI beef cattle prices to remain strong for 2021, NAB forecasts

East coast cattle prices will remain strong until the end of the year, according to National Australia Bank. Here’s what it forecasts.

National Australia Bank is forecasting east coast cattle prices to remain strong until the end of the year. Picture: Zoe Phillips

AUSTRALIA’S beef producers should be rolling in dough for some time yet.

National Australia Bank is forecasting beef cattle prices to hold up above 800 cents a kilogram until July but fall below 700c/kg by the end of the year.

In its latest Beef in Focus report, NAB said the eastern young cattle indicator had nearly doubled since ending 2019 on 482c/kg as a result of restocking after the long drought in Queensland.

Prices peaked at 888c/kg in February and remained about 880c/kg this week.

NAB senior economist and report author Phin Ziebell said high prices were likely to remain in the short term while the national herd rebuilds in size.

Meat and Livestock Australia estimated the national herd — which included dairy cattle — at 24.6 million in June last year, the lowest level since 1993.

“With the national herd so depleted, rebuilding will take considerable time,” Mr Ziebell said.

“Any meaningful herd rebuild will put upward pressure on young cattle prices, especially given the herd is at a 27-year low.”

NAB is expecting the EYCI to remain at about 850c/kg between April and June largely due to Queensland cattlemen restocking before falling to 700c/kg by the end of December.

It is forecasting prices to fall to 600c/kg during the first quarter of 2022 before settling at about 550c/kg during the second and third quarter of next year.

Mr Ziebell said had tracked reasonably closely with South American price indicators to 2015 before diverging markedly in 2016-17 when a seasonal bonanza hit Australia.

“Since then, Australian prices have become out of step with our peers, with heavy steers now almost double their South American equivalents,” he said.

“While we have no real difficulty moving Australian beef in key markets, our price competitiveness is a key challenge.”

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