Word of warning as State cashes in on cattle boom

The State’s beef producers and industry analysts are confident soaring national cattle prices will continue to climb as east coast farmers re-stock in the wake of the harrowing drought. The Eastern Young Cattle Indicator closed at 761.5¢/kg carcase weight on Monday after rocketing into uncharted territory and hitting a record 766.75¢/kg cwt last week. WA cattle farmers are also relishing the market rally, with the Western Young Cattle Indicator reaching as much as 701.5¢/kg cwt — less than 20¢ short of its all-time high of 721¢/kg cwt on July 12, 2016. Myalup cattle producer Geoff Pearson, pictured, has not sent any of his stock east amid the Eastern States’ demand, due to his own international and domestic supply requirements. However, the TW Pearson and Son managing director said the buoyant young cattle market was pleasing. “It is promising for farmers who have managed to hold on to cattle and are now selling them into the market,” Mr Pearson said. “One thing we have to be mindful of is that we don’t cut ourselves too short and dry up our supply going forward over here. “Farmers are enjoying these prices if they have cattle to sell, but if we are looking to put cattle back into feedlots in WA, it is going to become tough for us to supply our existing markets.” Earlier this month, the EYCI passed its previous high of 725.75¢/kg cwt, which was set on August 17, 2016. It came as widespread rain continued to fall across the Eastern States. Mecardo analyst Matt Dalgleish said feedlotters had fuelled the cattle price rise throughout January, while east-coast demand for restockers pushed values higher last month. With the national herd expected to slump 5.8 per cent to 24.7 million head by June’s end, according to Meat and Livestock Australia, Mr Dalgleish said buyers were competing for fewer young cattle. “Restockers really came into their own in February and took control,” he said. “A lot of it was led by demand at saleyards from Dubbo north up into southern Queensland — the rain has been getting the restocker market active on the east coast.” Mr Dalgleish last year forecast Australia’s young cattle market would improve dramatically once rain fell and gave drought-stricken Victorian, Queensland and New South Wales producers a much-needed reprieve. The Ballarat-based analyst predicted in November the EYCI would reach as much as 865¢/kg cwt this year. Following the rising value across the first three months of 2020, Mr Dalgleish said the prediction was likely to come to fruition. “Looking forward, the modelling for this year has an average annual EYCI of 640¢/kg cwt,” he said. “In terms of the peak, which usually takes place as we head into late autumn or early winter, we could see the EYCI reach mid-800¢/kg cwt. Young cattle prices heading about 800¢/kg cwt is definitely not out of the question. “It is all fair and well to say the prices will reach that level, but we do need to see finished cattle prices keep pace.” While the national cattle market jumps from strength to strength, multiple factors are threatening Australia’s meat exports. NAB agribusiness customer executive Khan Horne warned the coronavirus’ impact on international demand for premium proteins was unknown. “So far, Chinese domestic wholesale prices have held up despite coronavirus,” he said. “Beyond China, South Korea and Japan are dealing with major coronavirus outbreaks, and US preparedness to manage the virus remains unclear. “The extent to which Australian beef exports will be impacted remains to be seen, particularly given the uncertain effect on supply chains if the pandemic stage is reached.

Word of warning as State cashes in on cattle boom

Subscribe today.

Digital

Everyday Digital

Digital & Print

Weekend Papers + Everyday Digital