A nation embarrassed by a lack of rain

The Eastern Young Cattle Indicator (EYCI) continues to trek lower as cattle yardings reach a five-week peak, underpinned by high NSW cattle throughput. The EYCI closed this week 1.1% lower at 466.5¢/kg cwt, while its Western counterpart shed 3.2%. Despite the bigger fall in WA young cattle prices, producers there are still enjoying an 11% premium over their East coast neighbours, with the Western Young Cattle Indicator (WYCI) closing the week at 523.75¢/kg cwt.

East coast cattle prices were posting slightly mixed signals at the close of the week with Trade and Heavy Steers gaining 1-2% while the Medium Steer, Medium Cow and Feeder Steer Indicators softened between 1.5% to 4%.

Across the east coast states, cattle prices reflected either the presence or lack of rainfall during the week. In Queensland most cattle categories were flat on the week, except for Trade and Heavy Steers, acting as market book-ends. QLD Trade Steers are finding it tough with a 5.1% drop to 256¢/kg lwt, while QLD Heavy Steers posted a 2% gain to 261¢/kg lwt. NSW cattle categories are mostly 1-2% softer, with NSW Trade and NSW Restocker steers bucking the trend to see them gain 1.5%. In Victoria, gains were noted between 1-4% for all categories of steer, but Vic Medium Cow was the only disappointment to producers – off 4% to 169¢/kg lwt.

The dry conditions prevalent in NSW and Southern Queensland  pushed additional cattle to market this week and is underpinning the 23% lift in east coast cattle throughput to nearly 72,000 head – figure 1. NSW sale yard yarding levels are remaining the key driver of the higher east coast throughput with a 27% surge in numbers this week to sit just shy of 37,000 head (Figure 2).

The rainfall deciles map for May highlights the plight of cattle producers across much of the country in the past month. Victorian and Tasmanian regions were the only parts of the country to see reasonable areas of average to above average falls, and hardly any below average areas present (Figure 3.) This was a stark contrast to the rest of the nation – and perhaps a mostly red continent embarrassed by a lack Autumn rain.

What does it mean/next week?

The three-month rainfall outlook released by the Bureau of Meteorology yesterday doesn’t paint a great picture for NSW, SA, Northern Victoria and Southern Queensland. Much of the South-East corner of the nation is set for a dry Winter so don’t hang your hopes on a recovery in cattle prices in the near term.