Weekly cattle and sheep market wrap

Indicators

Widespread rain over eastern Australian over the last week has translated into higher young cattle prices, with the EYCI hitting a new record high of 1,187c/kg on Wednesday.

These higher prices were achieved despite yardings increasing by over 70% to 13,515 head.The average price paid for young cattle in Roma and Casino exceeded 1,300c/kg. Restockers are buying 46% of all young cattle at significant premiums to processors (260c/kg) and feeders (220c/kg). Light weight, young steers are extremely popular with restockers who are looking to fatten them. These conditions indicate that there is long term producer confidence in the market and that there are still areas in Queensland where producers can increase their stocking rates. It also reinforces that producers view the current COVID-19 related supply chain disruptions and subsequent reduction in slaughter as only short-term issues.

Wagga, which is usually a large contributor to the EYCI, is currently only accounting for 3% of young cattle in the EYCI. Wagga has had small yardings to start the year as producers down south monitor the processor situation closely, withholding cattle until processors return to the yards.

Sheep prices

Trade lamb prices fell 2% on Wednesday, corresponding with a 26% increase in yardings driven by Hamilton and Katanning. The influx of trade lambs has also come at a time when slaughter is 25% down on year ago levels which has caused a further softening in demand.

Ballarat, Katanning, Corowa, Carcoar, Cowra and Dubbo are all still paying a premium to the national price (NTLI). A big rise in Katanning prices comes as WA is not affected by any COVID-19 processor disruptions at this stage. Meanwhile, heavy lamb and mutton indicators have moved in different directions this week.

The mutton indicator fell 5.5% to 585c/kg on the back of larger yardings that were up 7,000 head or 77% on last week. Heavy lamb prices instead rose 2% to 852c/kg on the back of higher yardings, which almost doubled to reach 38,000 head. The increase in both price and yardings indicates a lift in demand that can be attributed to processing volumes being up by 100,000 head this week.

Slaughter

January is traditionally a peak period of lamb slaughter. This week,slaughter figures for lamb rose 46% or 100,000 head to 319,000 head, absorbing some of the summer supply as producers look to turn off grown out lambs. However, while achieving a weekly lamb slaughter of 300,000 head is encouraging, it is still 29% below 2021 levels.