Insights August 2023

Commodity Overview

• Australian cattle prices remained stable during July, and it is expected that prices will remain relatively stable next month.
• Slaughter rates are also likely to remain mostly stable in August due to strong supply availability. 
• National beef exports experienced another month of growth due to increases in the US and South Korean markets.

Australian cattle prices remained relatively stable throughout the past month. The Eastern Young Cattle Indicator (EYCI) finished 0.2 per cent lower this month at 557c/kg. This is 39 per cent softer year-on-year. The Western Young Cattle Indicator (WYCI) finished at 452c/kg, 24 per cent lower month-on-month. A greater supply of yearling heifers and yearling steers on the market applied downwards pressure on the WYCI. It is expected that cattle prices will continue to be steady during August as slaughter rates continue to stabilise.

National slaughter rates were softer in the last week of July, finishing two per cent lower than the last week of June. The decrease was primarily due to a drop of eight per cent in New South Wales. Queensland remained relatively stable as the decline in male slaughter was offset by growth in female slaughter. Victoria recorded an eight per cent rise throughout July and Western Australia increased two per cent. However, despite the fall in New South Wales, slaughter rates were 20 per cent higher than this time last year from a national level. A greater availability of cattle on the market following two years of a herd rebuild has elevated slaughter rates compared to a year ago. The gradual rise in weekly slaughter since the beginning of 2023 has correlated with the downward trend in cattle prices. Likewise, the recent steadying of slaughter over the past two months matches the EYCI's stability. It is expected that slaughter rates will remain relatively stable at around 120,000 head a week throughout August.

Australian beef exports increased by four per cent in July. This was led by strong growth to the US and South Korea which  rose 16 and 17 per cent, respectively. Declines were recorded to both China and Japan. Both of these markets have continued to bolster their domestic production and reduced the need for imports. National beef exports currently sit 22 per cent higher year-to-date following a record low year in 2022 and remain 14 per cent stronger than 2021. It is expected that demand from the US will continue to rise in the next few months as their domestic supply and exports decrease. Exports to the US are 60 per cent higher for the year-to-date. Despite recording a decline in July, exports to China are 35 per cent firmer for the year-to-date. Despite being the only major market to see a decline in year-to-date exports, Japan is still holding the title of Australia’s largest market, but China and the US are closing in.

Source: Meat & Livestock Australia