Robust live export and domestic feeder prices

Live cattle exports were reported at 66,950 head in July, the lowest reported monthly total in 2020. Lower live cattle shipments in July were likely amplified by the stronger volumes exported in June. However, the month of July also represents a crossover period in the north, before second-round musters typically commence in August.

Darwin export prices have responded to the tightening supplies out of the north, recovering sharply since dropping to 260¢/kg live weight (lwt) in April and realigning with the southern feeder markets. The Darwin live export feeder steer indicator is currently reported at 355¢/kg lwt, close to 100¢ higher since April and 35¢ higher compared to year-ago levels. At current levels, the indicator is reported at a 27¢/kg discount to the Queensland saleyard feeder steer indicator and a 44¢/kg discount to the New South Wales saleyard feeder steer indicator.

Queensland and New South Wales feeder steers remain well supported, as southern restocker and feeder buyers continue to compete for the limited availability of feeder cattle across the eastern states. Recent rainfall in New South Wales has helped maintain the premium over the Queensland feeder market, with record prices achieved at several store sales in recent weeks.

Looking ahead, the arrival of a positive rainfall outlook for the southern states will likely sustain the strong New South Wales and Queensland feeder markets. Supply limitations out of the north will also likely offer support to northern feeder prices. However, elevated live export prices and the current strength of the Australian dollar could create tough conditions for import countries. The result of this could be a slowdown in export volumes to key markets unless prices correct to more sustainable levels.

© Meat & Livestock Australia Limited, 2020