Insights August 2021
Insights August 2021
- Australian cattle prices increased during July with a continuation of tight supply on the market and firm demand putting upwards pressure on prices.
- Wetter conditions have seen a resurgence in the restocker demand, which supported the increases in price to the EYCI, WYCI and heavy steers.
Australian cattle prices continued to increase during July. Tighter supply and firmer demand were still providing support to the market. The Eastern Young Cattle Indicator (EYCI) rose by 5.9 per cent from the start of the month with a peak at 1,004c/kg in mid-July. A wetter month in eastern Australia likely contributed to further price growth by increasing restocker demand. Heavy steers also increased in value during July by 9.6 per cent to reach 791c/kg by the end of the month. A drier month for Western Australia helped push the Western Young Cattle Indicator (WYCI) to a softer value than in June. This indicator reached 995c/kg before settling at 952c/kg by the end of July.
Prices are expected to remain supported by below average supply over the coming months. A solid feed base in most cattle regions across the country should allow producers to maintain current stock levels. Cattle supply has improved in July with average weekly slaughter 31 per cent higher than in June for the east coast and 9.8 per cent higher in Western Australia. Slaughter was 19.8 per cent lower than July 2020 as producers are continuing to keep stock and rebuild herds.
Beef export volumes increased in July 2021, up by 10.4 per cent from June. There was increased export demand from China and Japan which drove export volume increases of 14.1 per cent and 15.2 per cent respectively. Continued tight supply has kept Australian beef exports 21.6 per cent lower compared to 2020. Chinese imports remained challenged by Argentina restricting export volumes by 50 per cent of 2020 levels. However, the US has continued to increase exports to China while Australia’s tight supply and restricted access for eight processors challenges Australian exports to China. The US lean beef import price continued to increase during July with a marginal change of one per cent to peak at 795c/kg before settling at 792c/kg.
Continued support for higher prices in the coming months is still expected to be driven by strength in restocker and export demand. A favourable rainfall outlook for major cattle regions should continue to provide further confidence for producers to continue restocking.
Source: Meat & Livestock Australia