Tight supply versus lockdowns to drive cattle prices

That's how many analysts and agents are describing the forces at play at the moment.

They also point out certain categories could see big price jumps - as, for example, cows have in the past fortnight - on the back of diverging or unique circumstances.

Cow numbers on offer have shot down in line with calving at the same time rain has urged restockers on and processors continue to provide good competition.

The Eastern States medium cow indicator is travelling well above the five-year average. Meat & Livestock Australia analysts reported it last week hit 280 cents a kilogram carcase weight, the largest hike across any category. On Tuesday, it finished at 272c, which is 57c above year-ago levels.

The Eastern Young Cattle Indicator has recovered to 758 cents a kilogram carcase weight, not far behind the 772c record it set in June and a solid 231c above year-ago levels.

Yardings have continued to shrink over the past week, with rain in some key centres seeing drastic drops. In Wagga Wagga yesterday, numbers almost halved.

AuctionsPlus was the exception, but Zoe Macfarlan reported the 3000 head boost in numbers last week was matched by a price rise across several categories, in particular pregnancy-tested-in-calf heifers which were up $76. Southern Queensland was both the top listing and purchasing region for the week, with the North West Slopes and Plains of NSW following closely.

ALSO IN BEEF MARKETS:

Few of the bank analysts are pointing to upward cattle market movement through August but agents across the country say prices have defied expectations on a regular basis this year.

Rabobank's Angus Gidley-Baird's latest Agribusiness Monthly beef report says cattle prices will drift slightly lower as COVID-19 continues to weigh on global demand but limited supply will still keep them strong.

Rural Bank's August Insights Update says cattle prices will hold relatively steady as price support from tight domestic supply is offset by increased competition in export markets.

Rural Bank believes upside potential for cattle prices remains unlikely until a sustained resumption of foodservice activity results in improved consumer demand.

The reimposition of restrictions in some parts of Australia, the United States and Japan is creating uncertainty and reducing optimism, it says.

While MLA has acknowledged the herd rebuild has been delayed - female slaughter is still well above the threshold of 47 per cent of the total kill - senior market analyst Adam Cheetham said tight supply would be the story for the remainder of the year and well into next year.

"The point to make is the confidence is there within the industry and certainly towards the back-end of this year we should see those (female slaughter) figures heading in the direction of rebuild," he said.

Demand drivers remain very uncertain for Australian product but key markets were performing well despite the challenges across the food service sector, he said.

"And numbers on feed show there is still confidence in that sector and demand for high quality grainfed beef is holding up," Mr Cheetham said.

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