Insights March 2022
Insights March 2022
- Following record prices at the beginning of the year, Australian cattle prices slowly eased in February on the back of strong slaughter rates at the start of the month.
- Australian beef exports rose in February to the four largest export markets but were lower year-on-year across the board.
The Eastern Young Cattle Indicator (EYCI) reached a high of 1,134c/kg in early February. It has since experienced a modest decline of two per cent month-on-month, falling to 1,105c/kg. Despite easing, the EYCI is still 28 per cent higher compared to this time last year. The decline in price was driven by an increase in cattle slaughter over the past month. The national heavy steer indicator rose by four per cent in the past month, up to 836c/kg. The Western Young Cattle Indicator (WYCI) increased two per cent to 1,117c/kg and is 21 per cent higher year-on-year.
February commenced with weekly slaughter rates increasing from January. However, slaughter declined at the end of February to be 23 per cent lower year-on-year and 14 per cent lower month-on-month. Tasmania and South Australia were the only states to experience increased slaughter during February. Queensland slaughter declined from 46,000 head in the second week of February to 33,000 head in the first week of March. This was on the back of closures to processing plants and other impacts from heavy rainfall and flooding. With the recent floods dealing considerable damage, it is not expected that production will continue rising for the next month as it did during the first half of February.
Australian beef exports rose by 37 per cent month-on-month in February. Exports to China, US, Japan, and South Korea all experienced an increase during the past month. Japan rose 59 per cent, whilst China and the US both increased by over 30 per cent month-on-month. However, according to the Department of Agriculture, exports in the past month were the lowest for February across the last five years and down 11 per cent year-on-year. The market has been heavily affected by the recent flooding in Queensland which has forced a shutdown of the Port of Brisbane for multiple days which is the largest in the country for beef. Gradual re-opening is underway and hopefully is back to full capacity in the coming month.
Australia’s cattle prices are still expected to continue easing slightly due to a rise in supply in the coming months. However, the favourable weather outlook, firm restocker demand and the effects of the severe floods will continue to support prices at well above average levels.
Source: Meat & Livestock Australia