Global outlook for red meat bolstered for coming months

Breeders are selling young cattle months early, despite global prices firming. WHY IT MATTERS

There is an optimistic outlook for cattle prices, AACo chief executive Hugh Killen believes. Picture: Petra Oates.

Confidence is mounting among breeders that cattle prices won’t decline late this year, but could hold firm or even improve as global red meat supplies tighten.

But many breeders are still selling young store cattle now to capitalise on big prices, and letting others take cattle to finished weights.

One of Australia’s biggest cattle companies, AACo, has painted an optimistic outlook for cattle when releasing its full year results last week.

Chief executive officer Hugh Killen said Argentina’s sudden decision to suspend beef exports for 30-days had invigorated the global market place by pushing beef prices up “overnight’’.

In the past week, cow beef prices into the US have also lifted to an 18-month high.

Market analysts who had been predicting price falls for cattle had now readjusted their outlooks, according to Stuart Bull, Meat and Livestock Australia.

“Before there was a bit of uncertainty around how long prices could hold up for, but now it seems forecasters are softening their views on any correction,” he said.

Across the Eastern States, restockers were more confident sending cattle back to the paddock, if they have the feed. MLA data showed a swing away from feedlotters dominating buying young cattle and back in favour of restockers from January on, rising from 37 per cent at the start of the year to 44 per cent so far in May.

Despite the strengthening outlook, many Victorian breeders are cashing-in young store cattle for the big money on offer, raising questions of the possible supply of finished cattle from southern regions in future months.

There was a huge clearance of store cattle out of Western Victoria last week, with 5200 head sold at Mortlake and 4200 at Ballarat. Mortlake will back-up again with another special yarding of store cattle this week.

Agents said the southern industry was in the midst of an “unbelievable” turn off of store cattle pre-winter, lured out by record high prices, but also a shift in production away from finishing cattle to heavier weights.

Charles Stewart Camperdown agent Alister Nash said sales out of the Western District for this time of year were unprecedented.

“If someone had said to me five years ago in Western Victoria we’d have a store sale this big (5300 head at Mortlake in May), I would have laughed at you,” he said.

“There’s been a lot more cattle sold through the store sales, and less through the fat pens. The industry is changing.

“Normally we’d sell 15-20 per cent (spring-drop weaners) pre-winter, now 90 per cent would be sold,” he said.

Most of the cattle were going to northern NSW, predominantly onto grass for restockers or for feedlot backgrounding.

He said many south west producers were preferring “not to take cattle the whole way through”.

Pricing was more consistent and producers were not hit with unexpected penalties from processors, he said.

“All the experts had it (prices) coming off 25 per cent before now but it hasn’t done that and the fat job has kicked in the last week.

“I guess nobody knows what is around the corner.

“The market has been grass dominated but you would think these feeders, who are all in there operating, they’d have a fair idea and have product forward sold so they wouldn’t be risking their money.”

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