Rain will determine cattle, sheep and lamb prices

The outlook for sheep, lambs and cattle remains positive, despite a roller coaster with prices in recent weeks. Here’s what analysts are predicting.

A dry autumn in some livestock producing regions of southern Australia has thrown the cattle and sheep market into another spate of volatility.

And while how much rain transpires during late autumn will ultimately determine how prices land, the outlook for cattle, sheep and trade lambs remains positive according to analysts.

At Mortlake store cattle sale last week there was not a lot of local Western District competition due to a tight season, while prices at the Ballarat store sale last Friday were quoted as cheaper due to a lack of confidence from buyers.

The EYCI is forecast to get to 700-750c/kg by the end of the year. Picture: Yuri Kouzmin

The Eastern Young Cattle Indicator has been on a roller coaster in recent weeks and was at 570c/kg carcass weight on Tuesday – down 38c/kg in a week – and the Eastern States Trade Lamb Indicator has also been moving around and was at 640c/kg on Tuesday, up almost 5c/kg for the week.

Episode 3 director and analyst Matt Dalgleish said the recent price volatility was around the reaction to the weather.

“We saw a similar thing last year, we had some panic selling and then the market recovered and then by the middle of January it had started to tank again,” he said.

“But on the positive we’ve seen some really strong export growth in the start of this year so that is underpinning the market.”

He said the rain that has fallen across NSW and Queensland so far in autumn has given confidence back to the market.

“I think (prices will rise if there is rain). We have seen a bit of a recovery and return to that confidence. Certainly the international fundamentals are positive for beef and lamb and sheep, all we need is the rain,” Mr Dalgleish said.

Looking ahead, Mr Dalgleish said he thinks the EYCI will land at 700-750c/kg by the end of the year.

“So we’ve got a bit more upside to go from here. We are going to see a bit of a peak through winter, providing the rain comes.”

Mecardo analyst Olivia Agar said there was a good outlook for trade weight lambs, into winter and spring.

There is good outlook for sheep and lambs. Picture: Zoe Phillips

Demand from importers had climbed, she said, compared to previous years.

Modelling by Mecardo that tracked annual slaughter figures against prices received showed increasing demand during the past four to five years.

Ms Agar said global factors were influencing the demand for Australian product, including the decreased volumes coming from key competitor, New Zealand, which was focussed on supplying Chinese markets.

Ms Agar said producers were still “burnt from last year” when prices fell away so quickly.

“There is a lot of supply, flocks and herds, so that is why we didn’t immediately see a (significant) rain driven rally,” she said, follwoing good falls at the start of April in some regions.

Meanwhile, light lambs have been withheld from market this week, following news last week of an interruption to the MK “bag” lamb trade to the Middle East.