Cattle prices headed up but no manic demand

Southern weaner prices so far are between 10 and 20 cents a kilogram on average above where the market finished in 2023 but still down 30 to 35 per cent on last year's January prices.

Early sales in Queensland have recorded a similar lift on the rates that were going in the week before Christmas.

Vendors and agents across southern sales said their expectations have been exceeded, or at least matched, and confidence was high due to six weeks of widespread rain.

The big turnouts at sales, however, were not entirely matched by bidding participants and there was certainly a willingness to walk past a pen once a price level had been reached.

The numbers on offer meant few buyers were being forced up.

Ripley Atkinson, Australian livestock and commodities manager for StoneX, said the element of manic demand that had been present at the January weaner sales in recent years had dissipated.

"As expected, the quality of stock on offer has been exceptional and northern NSW and Queensland buyers have been competing," he said.

Cattle have gone north to Inverell, Glen Innes, the Central Tablelands of NSW and into the Darling Downs in Queensland.

Mr Atkinson said quality was also clearly paying.

Meat & Livestock Australia's Steve Bignell said the rain had definitely brought an improvement in sentiment, something that started to show before Christmas.

"People are now confident the dry period won't be extreme and they'll be able to carry cattle through.That makes a big difference," he said.

Talk around the rails has been of some weather agencies now forecasting a La Nina forming by June.

Mr Atkinson said the rain since the start of December had connected the dots on subsoil moisture for a lot of regions, and prompted the planting of additional feed crops in many parts.

"With a body of feed about for most regions, I'd expect these price lifts in the weaner markets to broaden into the general markets," he said.

Many agents made the point that at current rates, the profit margins for all parties were relatively strong, which should provide a strong foundation for the market going forward.

Mr Atkinson said if the La Nina did eventuate in 2024, the outlook for the cattle market would be more bullish and slaughter could reach at least 10-year averages for 2024 at 7.6 million head.

Global AgriTrends analyst Simon Quilty said without follow-through in global market demand, the cattle market improvement could not be maintained.

Right now, demand from Australia's top beef customers - Japan, Korea, China and the United States - was slow.

In the last six weeks of 2023, imported 90CL (chemical lean) beef prices into the US fell by 25 per cent, he said.

"By mid-year, we need to see a lift in global market prices, otherwise rising cattle prices will run out of steam," Mr Quilty said.

In a nutshell, global markets are overstocked and rising interest rates, high inflation and struggling economies are taking a toll on consumer demand for beef.