THE store cattle market has jumped on the back of good rain across Southern and Central Queensland, delivering liveweight gains of up to 20-30c/kg for young cattle.
And with the Bureau of Meteorology predicting more rain this month, further gains are expected as restockers take advantage of fresh spring pasture.
The lift in the market took MLA’s eastern young cattle market indicator to 517.75c/kg dressed after the 2800 head Roma sale on Tuesday. However, the market is still about 200c below prices being received a year ago. In fact the young cattle market is still about 35c/kg less than than lowest prices received in 2016.
Ray White Livestock coordinator Bruce Birch said the rain has delivered plenty of confidence. “Where there has been 25mm-plus falls there should be some good response,” Mr Birch said. “But where there have been those heavier 75-100mm-plus falls in Central Queensland there will be plenty of producers who will be holding cattle back from the market to put on more weight. That is likely to tighten up supply considerably, adding more pressure to the market.”
Rod Turner, Landmark, Roma, said 30-110mm in the Maranoa and good falls in the Warrego had changed the mood of the industry.
“It was just so dry for so long. Let’s just hope it keeps coming,” Mr Turner said. “During the past six weeks we’ve see a lot of weaners sold that would have gone on to be heavier weight steers. Now there’s a scramble to get cattle and even bulls. The mood really has changed.”
However, there appears to be significant resistance from under pressure processors to increase grid prices.
According to Meat and Livestock Australia values for yearlings, grown steers, heifers and cows were firm on week-ago levels. Bulls and MSA categories even eased, with the margins narrowing between MSA and non-MSA types.
This week in Queensland over-the-hook quotes averaged: 489c/kg dressed for yearling steers, 484cfor yearling heifers, 509c for MSA yearling steers, 485c for 300-400kg grown steers, and 425 for 300-400kg cows.
Major processors contacted by Queensland Country Life said while the rain was extremely beneficial to the industry as a whole, the economics of export markets and feedlots had not changed.
Although there had been a 2c easing in the Australian dollar to US78c, grain prices remained high and beef remained hard to sell at anywhere near breakeven levels.
“We needed the rain and it’s the best thing but it also adds to the challenges,” one processor said. “In the short term the market may respond as it always does after rain but when the losses at meatworks are in the hundreds of dollars per head it is tough. We’re being smashed by costs and especially by cheap US beef going into both Japan and Korea.”
The processor said rather than raise rates in response to a reduced cattle supply, meatworks would bring their shutdown dates forward. A big drop in number of cattle on-feed was also expected, he said.