Hot weather hits prices

Hot weather hits prices

Stock and Land Beef

BEEF cattle prices, both store and prime, have taken a hit in the past weeks, dropping back to levels not seen in recent times.


BEEF cattle prices, both store and prime, have taken a hit in the past weeks, dropping back to levels not seen in recent times.

And while no one expected the boom of the past two years to last forever, the cut in margins has been felt across the industry.

A dry end to spring and hot summer across the whole eastern sea board has been one of the biggest contributing factors, while Australia's high dollar has also been a hindrance to the market.

Meat and Livestock Australia reported six per cent more cattle through the yards last week, but they still saw significantly less than the same week in 2012.

The Eastern Young Cattle Indicator (EYCI) finished last week at 312 cents a kilogram carcase weight – well below the same time in 2012 and 2011, but about on par with 2010.

Elders area manager Paul McCormick said despite the decrease in prices, most of the trading conditions were sound.

"Our dollar is hovering where it has done with no big change and there has been no food safety scares or that sort of thing," he said.

"This would point to weather being the biggest impact – everyone would benefit from rain in northern Australia."

Prime cattle prices continued to fall this week, but Mr McCormick said it could be good for the industry that the two markets were fairly even.

"Not since 2006 or 2007 have seen store and fat prices in such balance, even though it is a poor balance at the moment, they are in sync," he said.

"Weaners were making 230c/kg-plus not that long ago, and heavy steers were only making 200c/kg – now fat and store cattle sit at 160-170c/kg.

"Such a large percentage of our cattle are backgrounded these days, we need those guys to make money.

"If there is a chance they can get a margin from the weaners they are buying now, there might be a bit in it for everyone – when the store price was higher there was no room for other sectors."

With feed grain making more than $220 a tonne, Mr McCormick said the feedlot cattle barometer was still well into the negative but for backgrounders and grass finishers, there was an opportunity to take the feeding and trading margin out, which hadn't been the case for a long time.

Landmark Euroa's Russell Mawson said while the job is hurting now, it will turn around with an autumn break.

"There is going to be a good quid in it for those who kept cattle on, or for the opportune backgrounder," he said.

"The lamb job is gaining confidence because there are no numbers, and you will see the same with cattle when the rains come."

Mr Mawson said the lamb market would only prosper further going into the boom of Australia Day weekend, and because of the current reliance on the domestic market, supermarkets needed to get behind beef as well.

"It has come off very sharply compared to other years, and our costs of production – fencing, fertiliser, feed – are high," he said.

"For a feedlotter it is costing a $1 a day to keep them alive, $2 to fatten them – there is not enough margin to do it.

"We have to keep encouraging the Woolworths, the Coles and the Aldis to promote Australian beef."


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