Increased supply takes heat out of cattle market

The EYCI dropped 6.75 cents from the previous week, to close last night at 658.75 cents per kilogram carcase weight.

Meat and Livestock Australia analysts said there was a general rise in yearling cattle offered, the most prominent at Dalby and Toowoomba in southern Queensland.

The EYCI was still 84.75c/kg above where it was the same time last year and very much in the realms of record territory, they said.

George and Fuhrmann agent Blake Doro said numbers had lifted from the 800 mark to 1000 to 1100 head at Warwick in the last few weeks, with increased supply across all categories.

Oat crops in northern NSW and southern Queensland were starting to finish, pushing more supply onto the market, which was typical for this time of year, he said.

“If no rain arrives we’d expect numbers to continue to increase through this month,” he said.

Commonwealth Bank director of agri commodities strategy Tobin Gorey said the EYCI had now erased all of the big step-up it took in late July and August.

Cattle slaughter numbers are also starting to increase as a result of the lifts in supply, with slaughter last week in excess of 130,000 head for the first time in 15 weeks.

Every state was in the green for overall cattle, with the biggest lifts in NSW, which recorded a 12pc increase on the week before.

The Queensland calf slaughter was up 22pc on the previous week, which puts it at just negative 1pc year-on-year.

Meanwhile, MLA’s latest export snapshot shows beef shipments continue to dwindle on the back of tight cattle supply and lack of price competitiveness, with year-to-date volumes back 22pc, at 842,000 tonnes shipping weight.

Mr Gorey said encouragingly though, market chatter suggested some US traders had been caught short and had bid up 90 chemical lean prices to secure limited supplies of imported beef.

That uptick in the US imported beef market should help to reduce some of the conflict between Australian cattle and beef prices, he said.