Cattle/sheep market reports
LOOKING back at 2018, the year started off with an element of optimism in the cattle market.
The seasonal outlook appeared to favour re-stocker buying – in the short-term - with the Eastern Young Cattle Indicator (EYCI) opening the year at 562.75¢/kg carcase weight (cwt), following a period of consolidation the year prior.
Intentions were for the herd to continue to rebuild and a general expectation that young cattle supplies would remain tight throughout the year.
As of mid-last month, the EYCI low for the year was recorded in August at 444.5c/kg.
Re-stocker buyers have largely been spectators, as the store market came under pressure from the poor season that eventuated.
In August, NSW was declared 100 per cent in drought, and many areas across the eastern seaboard suffered from some of the lowest rainfall on record during the winter months.
Supplementary feeding became essential for a large proportion of producers, as pasture availability was limited.
Unfortunately, a poor harvest unfolded in 2018, which led to rising grain prices and provided no reprieve for the industry.
The number of adult cattle processed nationally for the yearto-October (latest available ABS data) lifted 10 per cent year-onyear, to 6.6 million head, with the aforementioned conditions elevating turn-off.
Queensland adult cattle slaughter increased nine per cent compared to the same period last year, while NSW increased 11 per cent year-on-year.
Adult cattle slaughter is fore million head, nine per cent up year-on-year.
Female slaughter – 22 per cent higher year-on-year - has been the driver behind elevated slaughter numbers and the herd re-entering a period of contraction, as producers had little choice but to reduce their breeding herd.
The poor season led to competition for well-conditioned year progressed.
This was supported by robust overseas demand and a deprecia- tion of the Australian dollar creating favourable export trading conditions.
Processor competition consequently lifted, and as a result the heavy steer over-the-hook indicator (300–400kg, A-C muscle) in Queensland, NSW and Victoria gained momentum during the year.
Cattle on feed at the end of the September 2018 quarter surpassed the record set in the June quarter, rising to 1.13 million head, with feedlots playing a drought mitigation role and in turn supporting beef production.
some headwinds throughout the year, primarily in the form of rising grain costs, as crop yields were hard hit.
Despite record numbers of cattle on feed, it was not enough to offset a decline in average adult carcase weight during the year, as conditions left producers chasing weight.
However, the increased turnoff will see beef production in 2018 likely reach close to 2.3 million tonnes carcase weight, its highest total since 2015.
from the additional product available, with developing markets, in particular Asia, soaking up beef from all suppliers in 2018.
Calendar year-to-date exports to all markets lifted 12 per cent, to 1.04 million tonnes shipped weight (swt) representing the sixth consecutive year of exports exceeding one million tonnes swt.
Many producers that have held onto stock throughout 2018 will be desperate for a turn-around in fortunes and more consistent rainfall in 2019.
males in 2018 has impacted the size of the breeding herd and potential pool of cattle available for slaughter next year.
With many feed stockpiles depleted a better than average northern wet season is needed to avoid another wave of destocking.
This month, Meat and Livestock Australia will release their 2019 Cattle Industry Projections, which will provide an updated market outlook, along with insights behind expectations on production and the key markets to watch for in the New Year.