THE possibility of the world catching up to Australia, which for the past year has had the most expensive cattle, is the talk around the rails this week.
Should the shrinking herds and export hurdles developing in the larger beef supplying nations lead to a worldwide shortage and push export prices up, a cattle market in high territory could be cemented for years for Australian producers.
The Eastern Young Cattle Indicator is holding its ground, despite some lift in supply, particularly in the north. It finished yesterday at 885 cents a kilogram carcase weight, which is not far off the record 910c set a month ago and is 145c above the rate for this time last year.
While there is no question it is local conditions - that is short supply pushing up against red hot restocker demand - that is driving young cattle prices, the potential for solid global red meat prices also has an underpinning effect.
Last week's news that Argentina, one of the world's largest cattle producers, was halting its beef exports has already flowed through to analysts reducing the degree to which they forecast the cattle market will decline later this year.
The Argentine development was what the Mecardo team of analysts refer to as a 'black swan event' and resulted in immediate upward moves in the world beef trim pricing complex.
Agents say producers make their decisions based on what they see happening in the saleyard, rather than what's on the news, but the potential for higher finished cattle prices that comes with strong global demand definitely affects what someone will fork out for young cattle at the moment.
"Given the state of our herd, and now the world herd, cattle prices coming back to unprofitable levels seems impossible," Mecardo's Angus Brown said.
"My thoughts are that, from spring, we'll start a cycle where each year prices are lower than the previous year but having said that, they'll only come back to where export markets dictate they should be," he said.
Worldwide, there was, and would continue to be, plenty of incentive to produce as much beef as possible, he said.
Meat & Livestock Australia is forecasting both slaughter and live exports to be depressed for the rest of this year and into 2022. This lower turn-off will accelerate the rebuild, with the herd to grow to 28 million head in 2023, according to MLA.
Despite weather predictions forecasting average to below-average rainfall for eastern Australia in the coming months, restocker confidence remains high, MLA analysts point out.
Pakenham agent Tim Gibson, Alex Scott and Staff, said backgrounders and fatteners who had been trading through were now confident in paying bigger money for young cattle.
"A lot of people who've been watching for some time have also reached the stage where they accept the current prices and are starting to come back in," he said.
He said solid demand was still coming out of NSW for southern store cattle.
Online, the search for quality, young breeding lines continues to be a feature of the market. AuctionsPlus reports quality offerings below 200kg remain very scarce, while mid-weight young heifers continue to be highly sought, and as such vendors maintain high reserve levels in these categories.
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