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Insights April 2022

12 April 2022 |Cattle
Cattle image

Insights April 2022

12 April 2022 |Cattle
The April update provides an analysis of production and pricing trends for Australian cattle producers. It provides producers with a timely overview of current trends and an outlook for the coming months.

Commodity Overview:

  • Australian cattle prices have continued to gradually decline throughout the previous month. Rising slaughter rates applied downwards pressure on prices.  
  • Australia’s beef exports also have continued to track higher but are still considerably lower year-on-year.

The Eastern Young Cattle Indicator (EYCI) reached a high of 1,131c/kg in mid-March. It has since experienced a modest decline of 3.2 per cent to 1,095c/kg. Despite continuing to ease, the EYCI is still 25 per cent higher compared to this time last year. The decline in price was largely driven by an increase in cattle slaughter during the last month. The Western Young Cattle Indicator (WYCI) increased two per cent over the last month to 1,127c/kg, 17 per cent higher year-on-year.  The national heavy steer indicator fell two per cent through the past month, ending at 791c/kg.

Australia’s weekly slaughter declined at the start of March, before rising to end higher. Slaughter increased throughout the month to be 34 per cent higher year-on-year. This is also 22 per cent higher month-on-month. South Australia was the only state to experience a decline in slaughter rates during March. Queensland slaughter rose from 33,171 head in the first week of March to 49,571 head for the first week of April. This was on the back of plants reopening following the severe impacts of the flooding and heavy rainfall in March. It is expected that slaughter rates will continue to rise throughout the next month.

Australian beef exports trended upwards by 25 per cent month-on-month in March, however, were still lower year-on-year by 11 per cent. Exports to South Korea, Japan and the US all rose by just under 25 per cent throughout the last month while China recorded a 17 per cent rise. With China’s rise throughout the past month, it has overtaken South Korea to be Australia’s second largest beef export market for 2022 so far. With the Japanese new financial year starting April 1st, Australia’s tariff rate has marginally declined as per the Japan-Australia Economic Partnership Agreement, reaching 27 per cent this year and should reach a floor of 23.5 per cent in 2028.

Australia's cattle prices are expected to continue easing with an increase in supply throughout the coming months. Yet, with a favourable weather outlook and ongoing firm restocker demand, prices will continue to be supported at well above average levels.

 

Source: Meat & Livestock Australia

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