Restocker demand for cattle strong
18 October 2016
Following the second wettest September on record and an early start to the northern wet season, the Bureau of Meteorology’s (BOM) climate outlook for the October to December period points to above-average rainfall for much of the country. Given the widespread, and in some parts very heavy, spring rainfall – particularly across some of the previously drought-stricken regions – restocker demand is anticipated to remain high over the coming months.
Average weekly September cattle slaughter was 26% lower year-on-year, at 112,802 head, with all states registering lower levels.
- NSW slaughter eased 32%, to 24,177 head
- QLD slaughter decreased 23%, to 60,882 head
- SA kill slipped 29%, to 6,313 head
- Victoria slaughter was 26% lower on 18,389 head
- Tasmania kill decreased 13% to 3,041 head
Although cattle slaughter was anticipated to be lower year-on-year, wetter conditions in recent weeks have further subdued the seasonal lift in cattle turnoff so far this spring, with access restrictions to several physical markets contributing to even tighter availability, and stronger cattle prices throughout most regions. Total September cattle saleyard supply decreased 33% year-on-year, to 152,162 head.
The young cattle market is well and truly being driven by strong restocker demand and tight supplies as a result of above-average rainfall across large swathes of the country. The EYCI in September averaged 713¢/kg cwt, up 21% year-on-year.
Under these circumstances, its little surprise cattle prices continue to reach unprecedented levels. This makes it critical, especially for restockers paying extremely high prices, to take a step back and analyse some of the longer term trends.
