May 2023: Australian Cattle Market Analysis
National Feeder Steer Prices
The Australian cattle industry has seen a decrease in prices as of May 2023. The National feeder steer prices saw a drop of 15%, going down to 337 cents per kilogram of liveweight. The term "liveweight" refers to the weight of the animal while it is still alive, as opposed to "deadweight," which is the weight of the carcass after the animal has been slaughtered and processed.
Supply and Restocking
One of the reasons for this decline in prices appears to be a high supply of cattle due to a long period of restocking. Restocking refers to the process of replenishing herd numbers after a period of depletion, usually caused by factors such as drought, disease, or market-driven culling. This increase in supply could lead to lower prices as supply exceeds demand.
State Level Prices
At the state level, prices eased by 8% in New South Wales and South Australia. This decline is not confined to just these two states. Nationally, prices have dropped by 42% compared to this time last year, indicating a broad-based decrease across all Australian states.
Eastern Young Cattle Indicator (EYCI)
Another important benchmark for Australian cattle prices is the Eastern Young Cattle Indicator (EYCI). This indicator reflects the market for young cattle, generally under 20 months of age, that are suitable for both domestic supermarket and international trade markets as veal or young beef. The EYCI also took a hit, losing ground early in May after finding some support in April. Currently, it is trading at a level that is 14% below the previous month and a significant 44% below the levels from a year ago.
Impact on Australian Cattle Farmers
These falling prices may be a cause for concern among Australian cattle farmers. Lower cattle prices mean less income for these farmers, potentially impacting their profitability and financial stability. However, it's also worth noting that agricultural markets are cyclical and can be influenced by numerous factors, including weather conditions, global demand, and local farming practices, among others. As such, these current conditions may change in the future.