Cattle market - October update - Elders Rural Services
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Cattle market – October update

At a glance

  • National trade steer prices reach a new two year high of 543 c/kg lwt, 5 per cent (pc) higher than last month.
  • Spring is currently four to six weeks behind usual conditions in southern Australia, which is delaying pasture growth and weight gain in young cattle.

Market fundamentals

International

Beef exports from Brazil increased sharply in September, up 31.4 pc despite a ban on exports to multiple countries including China. Early in September, a ban on beef exports from Brazil was imposed due to two cases of mad cow disease. The spike in export volume was due to a clearance of pre-certified beef, according to Brazil’s Ministry of Economy.

However, beef exports in October could be negatively impacted if a resolution can’t be found quickly. Global beef supply is already tight, halting supply from Brazil has the potential to hold prices higher in the short term.

Argentina, the world’s fifth largest beef exporter, removed an export ban on beef to China this week. The ban had been imposed to combat rising local food prices. Argentina don’t compete directly with Australia on premium cuts of beef, however, on balance the re-introduction of Argentina into the Chinese market will likely trim a portion of lower quality beef exports that were coming from Australia.

Local

The Elders Weather outlook for October forecasts multiple cold fronts across Australia from 14 October onwards. The cold fronts are expected to push rain from the tropics towards southern Australia.

National trade steer prices are up 5 pc compared to a month ago, achieving a record high 543 c/kg lwt. National medium steer prices increased 2 pc to 456 c/kg lwt, both categories were helped by tight supply for this time of year.

At state level, South Australian trade steers recorded a 28 pc gain on this time last month. Both New South Wales and Western Australia recorded growth in medium steer prices, increasing by 11 pc and 7 pc respectively.

Average daily cattle yarding’s for September increased by 3 to 21pc across the country compared to last month. However, the September average remained below this time last year for every state except Queensland, which saw a 15 pc increase driven by improved seasonal conditions.

Stud sales across the country are heating up with records tumbling almost daily. You can read about some of the significant sales from September in our latest edition of bidders, winners and records.

From the field

Victoria and Riverina

“Spring is currently four to six weeks behind usual conditions which has delayed pasture growth and in turn weight gain in young cattle. However, soil moisture is excellent across most of the state, as warmer conditions develop there will be no shortage of grass to prepare weaners for market. One of the key sales for the month ahead will be the Elders Kerr & Co annual spring cattle sale at Mortlake on 22 October.” – Matt Tinkler, Elders Livestock Manager.

Queensland and Northern Territory

“The store and feeder markets are flattening off driven by a lack of export demand due to COVID-19 disruptions in key markets. This has pushed a number of cattle onto the domestic market, resulting in downward pressure on Brahman prices with the gap widening to between 30 to 40 cents compared to flat back cattle.

Slaughter prices are holding up ok with processors managing to balance out supply and demand. In terms of seasonal conditions, there are signs of an early wet season in the north which could start to push cattle to market in the short term.” – Paul Holm, Elders Livestock Manager.

Graph showing national trade steer prices continue to trend higher.
Graph showing national trade steer prices continue to trend higher.

Upside

  • Increasing demand for beef in a tight supply environment.
  • Seasonal conditions remain conducive for re-stocking.

Downside

  • Yarding volumes are increasing but remain below year ago levels.

Market indicators

Table showing how national trade steer prices continue to trend higher.

Note: States without sufficient data for the current month or without data for a specific stock category will not appear in the table.

*The forecast shown on the graph is derived from an auto regression model (ARIMA) which was used to generate the high and low 68pc confidence interval. The ARIMA model draws on data from 2016 to now. The model is purely mathematical and should only be used as a guide for where prices could land in the next two months.

Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.


The information contained in this article is given for the purpose of providing general information only, and while Elders has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and Elders assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this article, please contact Elders.

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