Subscribe to The Weekly e-newsletter
For in-depth red meat market news, information and analysis.
Breeding stock supply contraction supports prices
06 August 2020
Key points:
- Tightening supply continues to support strong cow prices
- Increased global competition for manufacturing beef
- Restockers provide solid competition to processors for cows
Given producer intentions to rebuild herds amid favourable seasonal conditions, the supply of breeding stock has contracted considerably in 2020. Producers have hit calving time and the number of cows ready for slaughter will continue to diminish. This will combine with already limited supply on the back of a large sell-off last year. The domestic cow market has seen support in recent weeks, highlighted by higher prices across the eastern states, primarily in Queensland.
Queensland over-the-hooks (OTH) cow grids saw an average increase of 6¢ across medium cow specifications (260-280kg A-E), to 535¢/kg carcase weight (cwt), and a 7¢ lift across heavy cows (300-400kg A-D), to 561¢/kg cwt this week. In NSW, average cow OTH prices remained stable week-on-week, at 519¢/kg and 553¢/kg cwt for medium cows and heavy cows, respectively. Prices were also unchanged in Victoria this week, at 506¢/kg and 531¢/kg cwt.
Saleyard prices have also found support, with restockers supporting prices, given the heightened competition with processors for cows at the moment. This has been especially evident in New South Wales and more recently in Queensland, however, Victoria has consistently held a price premium for processor cows to restockers.
The eastern states medium cow indicator on Tuesday 4 August was reported 280¢/kg live weight (lwt), up 13¢ on the previous week and the largest increase across any category. National Livestock Reporting Service (NLRS) data highlights New South Wales and Queensland as the main drivers of this increase, both lifting from the week prior, with Victoria seeing only a modest decline.
For the week ending 2 August 2019 the NLRS recorded 11,393 cows sold across New South Wales, Queensland and Victoria. For the same period this year, yardings totalled 5,441 head, a 52% drop on 2019 levels, as stock retention has lifted and fewer cows are available to processor buyers. However, Queensland and New South Wales female slaughter rates increased 7% and 9% last week, as some producers looked to take advantage of the strong prices.
© Meat & Livestock Australia Limited, 2020
