Skip to main content

Insights June 2022

16 June 2022 |Cattle
Cattle image

Insights June 2022

16 June 2022 |Cattle
The June 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 steadily increased during the last month and remain well above this time last year.
  • Cattle slaughter improved in May after a sluggish April which helped drive a 30 per cent rise in export volumes.
  • Cattle prices are expected to remain stable in the coming month as increased supply is matched by firm restocker demand.

The Eastern Young Cattle Indicator (EYCI) increased throughout the last month, peaking at 1,130c/kg in early June. The EYCI is currently 3.6 per cent lower than the start of 2022, but still 22.7 per cent higher than a year ago. The Western Young Cattle Indicator (WYCI) dropped from 1,222c/kg at the start of May to currently sit 9.1 per cent lower at 1,111c/kg. This is eight per cent higher year-on-year and back within one per cent of the EYCI.

Weekly cattle slaughter trended higher during May, recovering from a tight month in April. National slaughter in the first week of June was 6.4 per cent higher month-on-month. Despite a rise, slaughter was still 3.6 per cent lower than a year ago. It is expected that slaughter rates will continue to steadily climb throughout the next month.

Increased slaughter in May helped drive a 29.6 per cent rise in Australian beef exports from April. This took export volume to 4.6 per cent higher year-on-year. Exports to Japan rallied by 85 per cent to their highest point since March 2020 and 17 per cent above this time last year. Strong export growth was also seen to South Korea, China and the US who all experienced rises between 10-25 per cent month-on-month. China remains Australia’s second largest beef exporter for 2022 so far, marginally ahead of South Korea. The lockdown in Shanghai easing in the last month has allowed for improved trade conditions, contributing to the rise in beef exports to China.  

Australian cattle prices are expected to remain stable over the coming month. An increase in supply is likely to put downward pressure on values. However, this is set to be counter-balanced by firm restocker demand fuelled by ongoing wet conditions and a favourable rainfall outlook. This will keep prices steady and well above average levels for the coming month.

An emerging risk to the Australian cattle industry is foot and mouth disease (FMD) which has been identified in Indonesia. FMD is a serious threat to the livestock trade in Australia. The Australian Bureau of Agricultural and Resource Economics estimates that an outbreak of FMD in Australia could cause $80 billion damage to the meat and wool trade. It is worth noting Australia has a world class biosecurity system which has kept FMD out of the country since the last outbreak occurred in 1872.

 

Source: Meat & Livestock Australia

Related Topics

Most Popular

Cattle 09 May 2022
Insights May 2022
Cattle 12 April 2022
Insights April 2022
Cattle 09 November 2020
Insights November 2020
Cattle 08 February 2021
Insights February 2021
Rural Bank - A Division of Bendigo and Adelaide Bank Limited
© Copyright 2022 Rural Bank | ABN 11 068 049 178 | AFSL/Australian Credit Licence 237879