The Australian Ag Podcast: David Foote on beef outlook and Barry Large on grains

Australian cattle prices have likely bottomed out with some reprieve for producers expected over the next months, according to Cattle Australia boss David Foote.

Cattle Australia chairman David Foote on his Queensland cattle property near Kilcoy. Picture: John Elliott

Australian cattle prices have likely bottomed out with some reprieve for producers expected over the next months with the US forecast to enter a herd rebuilding phase post-drought.

That’s according to Cattle Australia president David Foote who told The Australian Ag Podcast today that while the sharp reduction in saleyard cattle prices over the past year had taken him somewhat by surprise, rates were tracking at levels similar to those commanded before a drought-forced sell-off of stock in the US.

Australia’s Eastern Young Cattle Indicator ended Monday at 554c/kg carcass weight – down 30c/kg in a month and a whopping 496c/kg lower than this time last year. Heavy steers averaged 281c/kg – 146c/kg cheaper than last year while processor cows were 134c/kg down on 12 months ago to average 199c/kg.

“With more emotion than science in my response, I actually think we are at the bottom (of the market),” Mr Foote said.

“But the bottom may be a little bit wider than we think – it’s not going to be a V down and a V up. We are waiting for the market signals to come out of the US – this is all predicated on the US starting its herd rebuilding process following the past two years when there has been a massive herd reduction.”

Mr Foote said with the US both the largest importer and largest exporter of beef in the world, its herd dynamic had an enormous impact on Australia’s trading across a number of markets including Japan, China, Korea and Taiwan.

“When you have a surplus, it puts an enormous amount of product into the market at competitive pricing,” he said.

“They killed two million beef heifers last year that would normally be retained. In fact they killed seven million more cattle last year – which is the equivalent of the Australia’s kill.”

Mr Foote said US herd rebuilding was initially expected to begin in April-May but was now looking more like June or July before any impact would be realised.

“As that tap turns off then the balance of supply-demand should come back into play,” he said. “We are on a flat bottom but I think the uplift towards Christmas is very positive.”