Rain sparks price rises as supply falls

A weaker supply and some rain raise processor competition

Sales
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Rain, or at least the promise of some, led to reduced supply, and higher prices.

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Right across the eastern seaboard, we saw some very cheap sales three weeks ago.

At this time, producers started pulling back supply, and now, coupled with some rain or at least the promise of some, supply has fallen right away.

Supply was weaker last week, but Monday markets saw a big drop in supply, as producers could see and feel some rain.

At the start of this week, Wagga Wagga, NSW, agents offered a heavily reduced supply of 2100 cattle, down almost 30 per cent on the previous week.

This market was not alone with Pakenham offering a reduced yarding.

Similar to all other markets in Victoria, South Australia and southern New South Wales, there was a huge lift in demand for cows.

Prices at most markets were between 20-50 cents a kilogram liveweight higher, and included all classes of cows.

It takes very little time for the word to get out, and many markets from north to south, offered improved numbers of cows, on the back of the much dearer price trends.

Cow prices followed the upward trend at Gracemere, Charters Towers and Roma in Queensland off the back of rainfall, and even followed suit at Tamworth, NSW, despite numbers doubling and little follow up rain in sight.

At Forbes, NSW, on Monday, cow prices lifted 45-55c/kg, and many of these were beef cows to processors.

Better quality cows have, and will, reach over 230c/kg this week.  

However, numerous other classes of cattle showed reasonable to high price increases.

Meat & Livestock Australia's Eastern States Feeder Cattle Report, released Tuesday, showed a reluctance to lift prices for paddock sales, but saleyard prices leapt in price, as much as cows.

Direct sale prices lifted from 3-6c/kg, but saleyard prices were mostly 11-32c/kg dearer.

But these cattle, and cows, have been the most affected by a slump in prices recently.

If you are wondering what is to come, take a look at the Barnawartha market on Tuesday.

Agents offered only 310 head, to be one of the smallest sales on record for this major selling centre.

The Eastern Young Cattle Indicator (EYIC) has shown the strength of demand at saleyards.

At the close of trade on Monday, the EYCI was 471.5c/kg carcase weight, which was 50.50c/kg higher week-on-week.

The exchange rate of the Australian Dollar against the US Dollar remains low, trading at 71 cents on Wednesday morning, a favourable potion for exporters.

It will be interesting to see where grown steer and bullock prices finish this week.

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