How did the market respond to COVID-19?

Market data offers insights into initial responses to coronavirus

Beef
MLA said the analysis of the backfill cattle data showed the initial price decline recorded at the end of March was indicative of uncertainty in the cattle market directly following COVID-19 enforced isolation restrictions. Photo: Karen Bailey

MLA said the analysis of the backfill cattle data showed the initial price decline recorded at the end of March was indicative of uncertainty in the cattle market directly following COVID-19 enforced isolation restrictions. Photo: Karen Bailey

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The updated saleyards data offers some key insights into the initial market responses to coronavirus.

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MEAT and Livestock Australia has backfilled its data series for cattle and sheep sales which were not fully reported due to the COVID-19 pandemic.

The updated data offers some key insights into initial market responses to coronavirus.

Saleyard data was unable to be produced from March 26 to May 18, due to COVID-19 restrictions impacting reporting conducted by the National Livestock Reporting Service (NLRS).

Following the remote reporting period, MLA's NLRS consulted industry experts to conduct a detailed and rigorous data backfill process.

This entailed applying accurate visual assessment scores to compliment the price data already captured so that the traditional indicators could be generated for the missing period.

MLA said the key assumptions of this process were a large number of saleyards did not operate around the Easter break and public holidays, which led to the overstating of price changes.

The key findings indicate sheep and cattle markets both experienced similar trends during the remote NLRS reporting period, with strong restocker demand supporting store saleyard prices.

Finished stock experienced significant declines on the back of COVID-19 pressures.

Breaking down the data further, MLA said the analysis of the backfill cattle data showed the initial price decline recorded at the end of March was indicative of uncertainty in the cattle market directly following COVID-19 enforced isolation restrictions.

The Eastern Young Cattle Indicator (EYCI) experienced an upward trend from the second week of April through to June, on the back of significant rainfall across key southern regions, further supported by steady falls across most parts of Queensland later in May.

The strength of the restocker market was further highlighted by the EYCI closing the gap on feeder steers, demonstrating strong competition for light cattle to feed and breed.

When looking at the finished end of the market, heavy and medium steer indicators experienced the largest price decrease, suggestive of reduced export demand and a declining foodservice trade.

Along with these factors, MLA reported a shift in the types of cuts produced was prevalent in order to meet heightened retail demand for "cooking from home", also influencing the demand for certain categories.

Abattoirs looked to process more grinding and minced beef, supporting the medium cow indicator in comparison to steer categories, which are more conducive to premium cuts directed towards foodservice.

Cow categories also found further support from restockers, as producers looked to increase their breeding stock to consolidate herd numbers.

Similar to cattle, consumers lacked market confidence immediately succeeding the COVID-19 restrictions put in place, highlighted by a sharp decline in sheep price and kill totals.

However, MLA said on the back of good rainfall and the availability of feeder crops, most lamb categories gained momentum in April, driving an upward trend indicative of solid restocker intentions and heightened domestic demand.

Unlike lighter lamb categories, following the initial rise in April, heavy categories entered a steady decline on the back of supply chain disruptions and reduced foodservice demand in key export regions, which historically underpin high demand for Australian lamb.

Mutton continued trading at a low price point throughout the remote reporting period, before gaining momentum in May in line with declining production levels due to subdued sheep slaughter through the winter months.


The story How did the market respond to COVID-19? first appeared on The Land.

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