SIGNS are emerging the flow of finished and feeder cattle onto the market that has been pushing prices down for the past two months may be easing.
Smaller yardings and lifts in slaughter grids, despite ongoing pressure from the finished end for prices to drop, have given rise to hope we may now have hit the inflection point.
The Eastern Young Cattle Indicator has lifted almost ten cents per kilogram carcase weight between Thursday and today, to sit at 548.75c/kg.
That follows a steep 18 per cent drop from where it was at the start of June.
Meat and Livestock Australia’s manager of data intelligence Damon Holmes said the two major buyer segments driving the record cattle prices in the first part of this year were restockers and lotfeeders.
Restockers started to pull out from June on the back of dry conditions.
Increasing grain prices saw an easing of feeder demand, he said.
Commonwealth Bank agri-economist Tobin Gorey says Australia’s cattle herd rebuild has been stalled, perhaps even reversed, by dry weather in Queensland.
The double whammy of more animals pushed onto the market and less demand from restockers had fed the price decline, he said.
However, the lower prices go this season the greater the rebound once there is a proper break in the dry season as pastoralists play catch-up, according to Mr Gorey.
CBA’s latest beef outlook, presented in the quarterly AgQ released today, says cattle prices fell faster than expected but given seasonable northern rain, should recover well next year - not to a 700c EYCI but certainly in the high 500c.
Globally, the cattle herd has continued to expand in 2017 and United States live cattle prices have not even gravitated up as the US dollar has gone down.
Given the volume of Australian beef exports that go to the US, those prices play a big role in cattle prices here.
In the US, the cattle herd is now two million head above the 2014 low but still 1m below where it was ten years ago, so expansion will continue, according to AgQ.
The sector is closely monitoring current events in Texas, where Hurricane Harvey is causing significant damage.
Andy Vestal, of the Texas A&M Agri-Life Extension Service, said ranchers in eastern Texas were preparing for animal mortalities as a result of the hurricane.
India remains the top beef exporter this year, followed closely by Brazil - despite the run of scandals this year that at times have seen its markets shut down.
Along with Australia, the US and New Zealand, those two exporters represent 71pc of the global beef trade.
Even though export beef prices continue to come under pressure for Australian processors, there seems to be a feeling that slaughter cattle will be harder to source in spring, according to Queensland livestock marketers.
Agents and analysts agree a bit more length in the price lift trend is required before we can rely on the idea the floor in the market has been reached.
Emerald agent Cassie Lindgren, Michael Maguire and Company, said it was more the quality than the increase in supply that had pushed prices down over the past two months.
Where quality was on offer, the buyers would pay, she said.
“We’ve certainly seen an increase in supply since June - everyone is clearing out due to the dry - but not so much an increase in better quality cattle,” she said.
“Restockers are still looking for good quality cattle.”
Northern NSW agent Mitch Donovan, Ray Donovan Stock and Station at Grafton, said yardings had dropped 150 head in the past week, which had seen a firming of prices.
He expects supply to come to a quick stop if rained arrives as producers look to put kilograms on cattle.
“Things may be very hard on the finished product sell but at the end of day supply and demand rules the roost in the cattle market and supply is only going to get tighter now,” he said.