LIVESTOCK agents and market analysts are reporting a potential tipping point in the prime cattle market this week as the Eastern Young Cattle Indicator continues to trade in uncharted territory.
Meat processors' enthusiasm has sunk following another new record of 565.5 cents a kilogram carcase weight reached by the EYCI this week.
Leongatha's prime cattle market last week, which reached "scary" levels of 371c/kg, was a trigger point which caused major processors, including Thomas Foods International, to shy away from the price peaks and be outbid by restockers.
Bullocks sold at Leongatha last week, weighing from 600 to 750 kilograms, traded comfortably between $2200-$2700, while yesterday's (Wednesday) market dropped by 31c/kg.
"From last week to this week, processors have found their mark," Alex Scott and Co Wonthaggi livestock manager Rob Ould said.
"The top price has been achieved and they're all trying to get the job back to a processor-friendly level where they can operate a bit better.
"I would think we may have hit the peak of the fat cattle market."
However Mr Ould said while the prime cattle market may stagnate at current levels, he predicted the influence of "grass fever" would see store cattle prices climb.
"The prime sales will fluctuate on a week-on-week situation but the store sales will continue to stay strong because people are starting to restock because they've got good money for their bullocks and grass is starting to grow," he said.
The buoyant market has seen a wave of processors secure numbers interstate, according to Mr Ould, who doubted traditional supply of spring store numbers would be available.
"Everyone likes to have money while it is there," he said.
"In the fat cattle (supply will be available) but I'm not sure whether the store cattle will be because grass fever is a wonderful thing."
With Victorian slaughter numbers for July back by 22 per cent year-on-year, from 30,440 to 24,500, Meat & Livestock Australia's National Livestock Reporting Service operations manager Damon Holmes said there was a slow-down in processor demand.
"The kill numbers are returning to normal levels given the unprecedented turn-off in the last 18 months," Mr Holmes said.
"Supply will be the main driver of the market in the next 18 months, driven by the weather, not only in Victoria but most of the other states.
"If Queensland gets a significant rain event – which they haven't had in the last three years – supply will be tightened."
Concerned about securing supply, King Island farmer Ian Lester, who runs a 1000-head grass fattening operation has begun securing cattle from mainland sales.
Mr Lester purchased 200 head of Charolais and Hereford steers at the Bairnsdale and Heyfield prime markets, weighing 300-380kg, for an estimated 350c/kg.
"We needed 500 and I didn't want to buy 500 in one hit so I'm hedging my bets because I don't know whether the market is going up or down," Mr Lester said.
"If we need to buy 500 cattle between now and the end of October, it is going to be difficult."
