Insights October 2024
Insights October 2024
Commodity overview
- Cattle prices are likely to see a marginal increase with a firming of restocker demand and a slight reduction in cattle yardings at local markets.
- Slaughter rates have remained stable but are expected to show a modest decline during October, should the rainfall forecast eventuate as supply chain issues and a reduction of cattle on local markets slows processing capacity.
Australian cattle prices have eased during the past month. The Eastern Young Cattle Indicator (EYCI) saw a modest 4.7 per cent fall month-on-month while the Western Young Cattle Indicator (WYCI) softened 1.8 per cent. The EYCI is also 14 per cent lower than the five-year average. Despite this, current prices are still substantially higher than this time last year. An increase in national cattle yardings, particularly in southern Queensland, saw softer competition and contributed to lower prices. Large processors from New South Wales and Victoria continued to be active in the Queensland market. However, the supply of cattle outweighed demand and drove the prices lower. The latest Bureau of Meteorology forecasts are also showing a strong chance of above average rainfall in major cattle regions in the coming months. This is expected to increase restocker demand and decrease cattle yardings marginally. Both factors would be supportive of an uplift in prices. However, there is potential for a decline in prices, should rainfall not eventuate, leaving higher levels of stock on markets and seeing weakened restocker demand.
National weekly slaughter rates remained stable during September around 140,000 head. Strong supply of cattle on local markets provided processing centres with adequate stock numbers. From a national perspective, year-to-date cattle slaughter is currently 16.6 per cent greater than 2023. This has been primarily driven by a lift in female cattle slaughter. Queensland's female processing is showing a 28.5 per cent increase year-to-date, whilst in New South Wales it is 23.1 per cent higher. This compares to male cattle slaughter rising in Queensland by a more modest 7.4 per cent and in New South Wales it has declined by 3.3 per cent. This is further exemplifying the strong growth in female slaughter as the primary driver for the increase in volume processed.
Slaughter is forecast to decline marginally throughout October. With the current rainfall forecast, it is likely that livestock producers will retain stock to add more weight to cattle. This will in turn provide less stock on local markets for processors to purchase. Processing centres are expected to face logistical issues in transporting stock should the rainfall forecast eventuate. Additionally, the issues in transporting stock with wet conditions is likely to be accompanied by a reduction in supply.
Elevated supply of Australian beef is set to benefit from an expected increase in US beef imports throughout the rest of 2024. This should see extremely high levels of Australian beef exports to the US seen recently maintained. Import demand for Australian beef is likely to remain on par with 2024 levels throughout the majority of 2025 as well. Australia has now climbed to be the US’s second largest source of beef imports, just behind Canada. In 2023 Australia was ranked as the fifth largest supplier. Australia has contributed over 20 per cent of total US beef import volume in 2024. This is up from 14 per cent in 2023. This highlights the extraordinary year of exports to the US.
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