Cow market tracking well in yards
Heavy beef selling for over $2000 in yards
THE cow market has entered April on a high, with prices being driven up by low grinding beef supplies from both Australia and New Zealand into the US.
As the accompanying graph shows, usually cow prices ease in late autumn as the pressure of seasonal culling puts more grinding beef onto the world market.
But this year lower than normal female cattle slaughter in Australia and New Zealand, and the trading turmoil caused by the recent Brazilian meat scandal, has combined to push cow prices higher.
Illustrating this is a comparison of the average saleyard price for cows in early April for the past three years.
According to data from Meat and Livestock Australia, the national price indicator for medium cows in the first week of April shows:
■ 2015 was 164c/kg.
■ 2016 was 218c/kg.
■ 2017 is at 231c/kg.
There have been reports of extra heavy beef cows making over $2000 at saleyards in the past week, although returns of $1400–$1600 are more common for a run of
Shipments of beef from Australia to the US so far this year are 39% lower than the same three-month period in 2016.
good slaughter females.
In dollar per head terms, it worked out at $1500 across an average weight of 612kg, based on National Livestock Reporting Service data.
Driving the cow market is low grinding beef supplies from major suppliers into the US market.
The Steiner Consulting Group, which analyses the US meat market, said the latest export figures from Australia and New Zealand told the tale of improving prices for imported grinding beef.
Shipments of beef from Australia to the US so far this year are 39% lower than the same three-month period in 2016 (January, February and March). Sales from New Zealand are down 10%, the latest reports suggesting exporters from that country have been finding better pricing into Asia and are diverting meat to other destinations.
Shipments from NZ to China were trending 54% higher during March.
These key factors have combined to push grinding beef prices in the US higher, with values lifting nearly every week so far this year.
It has resulted in imported grinding beef trading at similar price levels to US domestic product.
The latest figures have prices for 90 chemical lean beef (90% red meat, 10% fat blend) at US 216–222c pound, just slightly ahead of the rate of US 214c/lb for imported product.
The performance of the grinding beef trade has a big impact on the overall strength of the beef market because the trim collected from all export slaughter cattle now just cull cows.
History shows that when the cow market is hot, it helps carry other cattle prices higher at saleyards.
In Australia heavy rainfall from Cyclone Debbie in the north should stem the flow of cows in the short-term, but weather forecasts are still predicting a dry end to the autumn in the south.
On the demand front the wildcard is the Brazilian meat scandal, which has prompted China to halt imports of beef from Brazil until more is known about allegations of bribery to inspectors and sales of tainted and out-of-date meat.
Brazil was the biggest supplier of beef to China during 2016, and there is speculation that continuing bans could lift prices for meat on the world stage if the Chinese have to find alternative suppliers.