Insights March 2023
Insights March 2023
- Rising Australian cattle supply in the next few months is expected to keep seeing Australian cattle prices decline.
- Export volumes are likely to increase in the coming months and meet rising demand from South Korea, China and Japan.
Australian cattle prices are likely to continue trending downwards over the next few months. This follows another month of steady decline in eastern states and Western Australia. The Eastern Young Cattle Indicator (EYCI) currently sits at 698c/kg. This is 8.6 per cent lower month-on-month and 37 per cent lower than a year ago. The Western Young Cattle Indicator has also fallen this month to 763c/kg, which is 12 per cent softer month-on-month. Lower prices are largely due to increased supply of cattle coming into the market following multiple years of a herd rebuild.
Rising supply levels are expected to continue putting downwards pressure on cattle prices. The end of February saw weekly eastern states cattle slaughter rises to just over 110,000 head. This was 34 per cent higher month-on-month and 42 per cent higher year-on-year, as more cattle continue to arrive onto markets. Slaughter is likely to continue rising and return to five-year average levels over the next few months.
Competition in Australia’s key export markets will also continue to influence pricing in the short term. A rise in slaughter levels helped push February export volumes 18.3 per cent higher year-on-year. On the back of continued recovery from COVID lockdowns, exports to China rose by 18.7 per cent month-on-month and are 8.6 per cent higher year-on-year. Further growth could be possible if the closure of Brazilian exports to China remains in place for a few months. This could see a boost in Australian beef exports to China as they seek alternative sources. Exports to major markets of Japan, South Korea, China and the US all saw lifts in February, and all sat higher than a year ago. The US and South Korea led the year-on-year growth in February with gains of 30 per cent and 26 per cent, respectively. It is expected that with Australia’s gradual growth in supply, export volume will continue to trend upwards in the coming months.
Australian cattle prices are likely to continue softening with rising supply on the market. Firm competition with the US is also expected to continue for the time being. However this will progressively ease in coming months as the country enters a herd rebuilding phase as drought conditions subside
Source: Meat & Livestock Australia
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