RED hot competition between restockers and feeder buyers combined with tighter supply than expected to make 2022 a record year for the cattle market.
A forecast flow of rebuild calves onto the market didn't really eventuate - it turned out producers had largely opted to cash in rather than rebuild. Yardings fell nationally by a quarter of a million head on 2021 levels.
That supply situation kept upward pressure on prices and kept in check panic around the possibility of an exotic disease incursion and seemingly endless inclement weather dramas.
In mid December, Meat & Livestock Australia reported the benchmark Eastern Young Cattle Indicator had averaged 1064 cents a kilogram carcase weight for the year to date, which was 11 per cent or 104c higher than the 2021 average.
The EYCI closed the year at 901c, which was 268c below the 2021 close, after a somewhat volatile run into Christmas; and the talk is now that it might lift somewhat in the new year.
Most agree, however, the cattle market won't start 2023 at the scorching pace with which it kicked off 2022, where southern weaner prices were $600 above the previous-year level.
The EYCI had hit a record of 1191c by the end of January, a level that was 97 per cent above the ten-year average.
In February, reports were of extraordinary confidence in the cattle game, largely off the back of a great season and more rain forecast and the thinking was while there couldn't possibly be any more upside to the EYCI, it was hold steady for the next few months.
In fact, Meat & Livestock Australia's industry analysts' forecast put the EYCI at 998c by mid year, which was very near spot on - it was 1013c on June 30.
The market tracked sideways through the flooding disasters and Ukraine war in March, with the EYCI not venturing much out of a 20c range to a top of 1130c.
By early April, restocker activity was coming off the boil in the north, helping to push young cattle prices down to their lowest point in six months despite supply continuing to tighten.
The red-hot feeder market was also cooling.
Come May, renewed restocker enthusiasm on the back of widespread rain across key cattle-producing areas halted the downward slide and the EYCI did an immediate u-turn and lifted back above the 1100c mark.
Analysts had started talking about an easing by the end of the year but suggested it would be no more than a five per cent drop.
Then exotic animal disease panic started to show, pushing the EYCI below 1000c.
By the end of July, it had dropped to 969c, which was 13c below the year-ago level. Agents were saying it wasn't just foot and mouth disease dampening buyer enthusiasm but other elements, including grain prices slowing feedlotters' willingness to chase the market up and concern around processing ability on the back of the labour crisis.
In August, there was a bit of a recovery - agents had expected the rebound, saying the big dip was in part led by hysteria - and by the end of September the EYCI was at 1069c.
Once it was identified a third La Nina was on the way, and people knew there would be plenty of feed for some time, the forecast for the big downturn in cattle prices was pushed out into 2023.
Despite wet conditions playing havoc with getting stock to market, the EYCI remained at a strong 1028c at the start of November but things went south after that.
Rising input costs, the pressure on consumers paying record retail prices for beef and volatility in global markets were credited with some of the buyer angst. EYCI supply also hit its highest point in three-and-a-half years and the EYCI bottomed out a 855c in the first week of December.
Still, cattle prices remained above the five-year average for the whole of 2022 and the EYCI spent its final two weeks of the year creeping back up.
Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
