Livestock prices up as producers show new enthusiasm after rain

Cattle and sheep markets have kicked strongly across eastern Australia, and it’s all due to one factor. Read why prices are up.

Rain across large swathes of eastern Australia has changed the fortunes of livestock producers as sentiment does a massive turnaround.

Prices for both prime and store livestock have shown big lifts and wool has not missed out either, recording successive weeks of better rates.

Some of the price highlights include:

THE Eastern Young Cattle Indicator spiking 36/kg in a week to close on Monday at 508c/kg carcass weight;

A JUMP of $60 for heavy crossbred ewes at Corowa’s prime sale this week; and

STORE values rising up to 100c/kg liveweight at Wodonga’s fixture last week.

RMA network chief executive officer Chris Howie said the lift in prices was “100 per cent around the rain”.

“The rain has flipped (lost) confidence on its head,” Mr Howie said.

“It’s led by the rain in Queensland and northern NSW which have had two rain events, and on the first one, some planted forage crops that have now had the second rain on them.
“It’s meant those producers who were not going to buy livestock are back in the market for both sheep and cattle.”
Mr Howie said the crisis of confidence stemmed from “over reporting and sensationalist reporting” of predicted El Nino conditions.
“A lot of people jumped to the worst case scenario and the situation manifested on itself – there were increased numbers on the market, and prices went down, so more stock went on the market and it stopped producers from buying,” he said.
“Processors copped a lot of blame but really, they were supporting the market and it was just that there was no underpinning by producers.”

The better prices in the past two weeks are a massive fillip for the livestock industry which had been bludgeoned with week-on-week falls since autumn, exacerbated by spring turnoff which depressed prices even further.

All cattle prime indicators are up between five and 17c/kg in the past week.

And the story is equally positive for the sheep industry, with lamb indicators rising between four and 40c/kg in the past week, while mutton prices are up 67c/kg or 62 per cent in just a month.

The livestock price lifts are largely being attributed to the late spring rain dance with totals of up to 200mm in northern NSW and southern Queensland the highest recorded.

Further south, some of the seven-day totals to Monday included 61mm at Hamilton, 50mm at Mansfield, 45mm at Wedderburn and 32mm at Bendigo.

But rain was patchy, for while Benalla registered 40mm, nearby Wangaratta only recorded 10mm for the week.

And while it is not ideal timing for those trying to harvest crops, it has certainly given a massive lift to confidence in the livestock world.

Selling action at a recent Wodonga store cattle sale – store values lifted up to 100c/kg at last week’s fixture.

Victorian Farmers Federation livestock group chairman Scott Young has a foot in each camp, waiting to harvest barley and canola, and put off by about 32mm early this week.

But he was thankful for the rain, not only to green up pastures but for its immediate impact on prices.

“What this rain has done has put confidence back in the market,” Mr Young said.

“It’s encouraged producers to get back into the market and buy, and that puts a floor in prices and doesn’t mean the only buyers are supermarkets and processors.”

While the recent lifts are welcome, Mr Young said there was still “a long way” before many were clearing their costs of production especially for lamb, and able to make a profit.

Livestock prices are also being influenced by a stemming of numbers onto the market after the rain.

Mercardo analyst Nick Symon said large amounts of rain across the east coast encouraged some producers to hold cattle.

“This had a positive impact on price seeing all indicators rise,” Mr Symon said.

“Yardings fell, off the back of the previous week’s significant jump, leaving buyers competing more over available stock in the market.”

Mr Symon said there was the expectation that volumes would be subdued as producers waited to see what the total rainfalls were “and how the market responds to the lower supply and higher prices”.

“The BOM is predicting more rain on the horizon, with a 60 per cent chance or higher probability of exceeding median rainfall for the east coast next week,” he said.

“If true, we can expect continued price support and rising confidence from producers to feed cattle through summer months.”

The price rises are coming off some of the lowest rates seen in at least a decade and Meat and Livestock Australia managing director Jason Strong said long-term forecasts about El Nino had been damaging to the industry.

“What we have seen in the past year is the sentiment of the industry and so much of the behaviour of the market has got out of step with conditions,” Mr Strong said.

“This discussion around El Nino has been one that has been really destructive around the sentiment in the industry.

“I think some of it has come from having three such fantastic years and it was hard to believe anything apart from a terrible result in the next year was going to be possible.”

But Mr Strong said it was the level and length of the discussion about El Nino, well before it was officially declared in September, that was so destructive to sentiment, with the flow on effect on prices.

“Having the knowledge about what happens or potentially is happening in our environment are incredibly valuable tools but they have been weaponised in the way we think about the industry and the sentiment,” Mr Strong said.

“If you listen to some of the commentary and perspective about El Nino, you would think it is going to be hotter and drier and never raining again.”

Beef Producer Jim Vasey is hopeful the price rises will continue this week. Picture: Zoe Phillips

Livestock producer Jim Vasey watches the weather forecasts carefully and said long-term forecasts have frightened people.

Mr Vasey, who has properties near Shepparton and at Mansfield, is selling cattle this week and is hopeful the change of sentiment will continue the lift in prices for his Angus and Speckle Park cattle on offer at Yea on Friday.

“We are hopeful the prices will be a bit better, and heard that last week’s sale at Yea was up to $250 dearer,” Mr Vasey said.

“We always want to get as much as we can for our stock like everyone does, and this sale could be up hopefully.”

Mr Vasey said the early and regular talk about an upcoming dry spring and summer had affected prices and the willingness of producers to either hold stock or to buy in more.

“We certainly watch the forecasts carefully and planted some sorghum last week on the back of predicted rain,” Mr Vasey said.

“It’s interesting to see how the livestock market can change so quickly based on the talk of rain.”

Jim Vasey with some of his lambs. Picture: Zoe Phillips