Key points:
- Darwin export feeder steer currently reported at 315¢/kg live weight
- Queensland and New South Wales feeder prices ease
- Supply uncertainity for northern and southern markets
Live cattle exports were reported at 80,750 head in August, the lowest reported monthly total since March 2018. Darwin export prices have responded accordingly, diverging from southern markets, in response to tightening supplies out of the north.
The current price spread has also been supported by weakening southern markets in recent months, with strong yardings and limited restocker competition in the store market, resulting in an easing price trend. Hotter and drier conditions are forecast for the remainder of the year, which will likely see consistent numbers of feeder weight cattle yarded and at lighter weights.
Feeder buyers remain the driving force, in a largely subdued store cattle market at present. However, declining entry weights for lot feeders, could challenge input costs, with higher prices for feed grain and depleted water supplies now becoming an increasing concern for the lot feeding sector. Placements could be affected as a result, underpinning further price pressure across southern markets, despite robust demand for finished cattle prices.
The Darwin export feeder steer currently sits at a 37¢/kg premium to the Queensland saleyard feeder indicator and has averaged 315¢/kg live weight in September. As the north edges towards the end of the mustering season, is not uncommon for this spread to develop, however, the extent will be dictated by how conditions play out in both southern and northern markets.
It appears supply limitations will support prices out of the north for the remainder of the year, however, both Brazilian beef access and the availibility of import permits could offer some uncertainty to the trade. Southern markets will wait on a definitive break to reinvigorate market interest.
© Meat & Livestock Australia Limited, 2019
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