Insights August 2024

Commodity Overview

• Australian cattle prices are forecast to increase marginally throughout the next month, on the back of a lift in restocker demand and a lack of strong cattle availability in southern markets, pushing buyers north.
• National beef exports are forecast to remain strong, with historically high demand from the US keeping volumes near record highs.  

Australian cattle prices recorded moderate growth throughout the last month. The Eastern Young Cattle Indicator (EYCI) rose 15 per cent throughout July. However, prices have eased marginally during the first week of August, settling at 666c/kg. High prices have come on the back of stronger local demand at cattle markets. Northern markets have reported a greater presence of southern buyers looking to bolster stock to match export demand. Most cattle regions, mainly in southern regions recorded rainfall of 10-55 mm in the past month. This has likely encouraged firmer restocker demand. The EYCI presently sits 19.7 per cent higher year-on-year. This is still 12.2 per cent lower than the five-year average. It is expected that with firm export demand, in particular the United States who reached the largest volume of exports since 2015 that prices will remain supported during the next month. The Western Young Cattle Indicator (WYCI) moved 15.6 per cent lower month-on-month. Cattle regions across the state did not record strong rainfall. This likely subdued local demand and pushed the price downwards.

National weekly slaughter rates throughout July remained in line with the previous two months. The weekly average sat just above 140,000 head, up a marginal one per cent from the 139,500 head in June. Whilst slaughter rates have remained stable, they sat 15.6 per cent higher year-on-year and 29.6 per cent higher than the five-year average. Cattle slaughter rates are forecast to remain mostly stable to slightly lower. This is due to multiple large operators in Victoria processing around 1,000 less head per week. This is a result of lack of cattle availability in southern states and seasonal maintenance works.

Australia’s beef exports set a new monthly record in July. National exports concluded the month at 129,998 tonnes. This is the highest monthly volume on record, breaking the previous record set in March 2015 by five per cent. The US continued to show firm demand for Australian beef, with a 34 per cent month-on-month rise to just over 38,500 tonnes. The reduction in their domestic supply has continually translated into stronger demand for imports. This has provided greater export opportunities for Australian producers. The 90CL Boneless beef trimmings price into the US has now hit a record, sitting at 987.9Ac/kg, further illustrating their appetite for Australian beef. Exports to China also recorded firm growth of 23 per cent month-on-month. However economic constraints and logistical issues in China have placed a ceiling on significant growth throughout 2024. Beef exports to Japan also lifted marginally, with elevated demand a byproduct of reduced US supply. Exports to Japan rose 2.7 per cent in July and up 48.3 per cent year-on-year. Similarly, South Korea continues to import strong volumes of Australian beef due to the reduction in US availability. Exports to South Korea lifted 26.4 per cent month-on-month. This is also 19.9 per cent higher than last year.

Source: Meat & Livestock Australia, DAFF