Key points:
- Rain and softer market performance in recent weeks tightened cattle supply.
- Restocker lamb demand in Victoria strengthened strongly this week.
- Processing volumes across all species remain well above the corresponding weeks in 2022, indicating strong capacity in the sector.
Cattle
The cattle market continues to operate in typical fashion. This week was a strong example of how the weather drives supply and demand from buyers and sellers.
Rainfall throughout parts of the eastern seaboard, coupled with a softer market in recent weeks, led to supply tightening significantly in some regions. National yardings fell by 27% or 15,000 head to see 41,000 head yarded, which is firm on the weekly average for 2023.
While drier conditions heading into winter saw numbers lift in other areas, yardings lifted at Singleton, Tamworth and NVLX Wodonga. An increase in supply leading into winter is not uncommon – these results indicate the market continues to operate in line with typical fundamentals usually experienced at this time of year.
Despite softer volumes, prices remained subdued across most categories in general. Commentary from the National Livestock Reporting Service (NLRS) continued to mention themes of weight, quality and finish offering the most upside in terms of price for sellers.
Queensland's rebuilding intentions remain clear, with the state driving a strong improvement in restocker prices this week for both steers and heifers following rain in some catchment areas. Furthermore, solid rainfall in the west saw Mount Barker register a very strong lift in prices as demand lifted with rainfall, improving buyer confidence.
Finished prices remain pressured, with the processor cow and heavy steer falling 17¢ and 11¢/kg liveweight (lwt) respectively this week. A strong supply of finished cows continues to be turned off based on age, with producers choosing to retain younger females. Evidently, supply of processor stock remains strong, with national slaughter numbers reaching their highest level since 2020 last week.
Sheep
In line with cattle, sheep and lamb supply also tightened on the back of rainfall and softer prices.
Despite the national indicator softening, demand for restocker lambs in Victoria was robust and prices saw a 57¢ or 11% increase to end the week at 570¢/kg carcase weight (cwt). This is a 102¢/kg cwt or 21% premium to the national price.
Finished lamb prices remain under pressure – with lamb supply on-farm evidently sufficient, processing demand at the saleyards was subdued this week.
The heavy lamb softened 6c/kg cwt this week whilst the trade lamb indicator remained firm. This high supply of lambs (which have been mostly held back due to wet conditions from 2022's spring flush) has provided processors with large supplies and the luxury of choice. The large volume of lambs available and booked into plants is reducing demand for finished lambs.
Mutton supply is also buoyant at present, despite lower saleyard volumes, evidently processors have booked in large supplies of stock which is negating the need to compete on mutton in the saleyards. All of this is because of the flock growth and therefore demand remains soft. The indicator fell 7¢/kg cwt this week.
Slaughter
Slaughter numbers across all species remain robust – a product of the exceptional herd and flock rebuilds and subsequent growth the cattle and sheep industries have experienced.
As expected, cattle slaughter has recovered strongly post-April, with last week's volume the highest since 2020 at 119,460 head. This is 37% or 32,000 higher than the corresponding week in 2022. This week, the weekly average of cattle processed hit 100,000 head (the first time this has happened since 2020).
The processing sector continues to cope with increased numbers of cattle, although next month's activity will determine the sector's ability to deal with higher supply on a regular basis.
Volumes of lamb processed remains above 400,000 head, indicating strong supply as a result of lambs held back from the spring flush in 2022.
Sheep slaughter remains elevated on the previous two to three years – a direct result of the flock's growth and the luxury producers now have in turning off older, non-performing females.
Goat slaughter registered its second highest week of numbers processed since March 2017, only behind the volume processed a fortnight ago. This data clearly demonstrates goat processing plants' strong capacity to deal with higher supply.
Looking ahead
Cattle and sheep markets are now operating normally. The past three years of favourable seasonal conditions for many regions, as well as intense demand across all species and categories, has been the exception.
The weather and resulting market sentiment are the key determinants of price and supply performance. When considering an impending winter and drier conditions in parts of the country, the markets' performance is reflective of this.
Weather will continue to dictate how markets react and finished stock will be influenced by supply and demand both domestically and internationally.
Markets
Blackall was not reported on this week.
Indicator review update
From Friday 2 June 2023, all of MLA's NLRS indicators will become "live", updating up to 12 times per day. This will ensure users have the most accurate, reliable and timely source of livestock supply and pricing information for timely decision making.
The live pricing information can be sourced at a national, state and regional level through the indicator dashboards, including the Eastern Young Cattle Indicator.
MLA will also release the latest instalment in its indicator improvements, the "Daily Markets Summary".
The Eastern States Daily Indicator will be retired on 30 June 2023 with a one-month adjustment period.
