Prediction – cattle prices may reach new heights

Southern Victorian producers still waiting on rain
The Southern Farmer
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ON THE RISE: An industry expert predicts cattle prices will hit their lowest in the current cycle this October, before rebounding to new heights over the next four years.

“SHOULD the drought get worse and continue into next year, then it is foreseeable that when good rains come and prices rebound the highs of 725c/kg CW of October 2016 could be surpassed in the 2020-2022 period.”

So said beef industry analyst, Simon Quilty, late last month.

Mr Quilty believes the cattle market will hit its lowest point this October – give or take a month – and then will begin to make ground, or at the very least, stabilise.

“It would not be unfair to think that Australian cattle prices would trade lower next year if the drought worsens – I do not believe this will occur, but instead is likely after October to trade sideways or even higher due to the old adage ‘you can only kill them once’,” Mr Quilty said.

Mr Quilty is “confident” that within the next four years, cattle records will tumble as prices skyrocket due to strong global beef prices.

Despite the positive market prediction, producers are struggling for feed day-to-day as they nurse stock through the dry winter.

“There is a lot of pressure coming from north of the border,” Elders Livestock agent, Ryan Sergeant, said.

“NSW is having a significant impact on the southern markets – the negative pressure is putting a lot of extra pressure on down here.”

Mr Sergeant works from Mansfield through to Alexandra and Glenburn and down into the Yarra Valley.

He said local cattle were selling well – and to good prices – due to a limited number of fat animals on the market.

“Markets are generally dearer, but that’s because the demand has increased for quality cattle; the supply just isn’t there,” Mr Sergeant said.

With that supply now tipped to peter out, Mr Sergeant said the next few weeks would be telling.

“Around this region we are wiltering out of our fat cattle because we are going through a tough winter – animals are just holding their own, they aren’t putting any weight on, and (so) it’s getting too cold for our fat cattle to be good enough,” he said.

With spring just weeks away, Mr Sergeant said it was likely the market would hold out longer than usual – until October – before falling slightly short term.

“A price decline is common going into spring because of the volume increase,” he said.

“The general rule of thumb is to get rid of your fat cattle before Melbourne Show weekend.

“In late September early October we often see a price decline because the Riverina and New England cattle come out of New South Wales.”

Grant Daniell is livestock agent with Charles Stewart in Ballarat, and said steers at the local saleyards (in late July) were making $3.23kg, weaner steers were hovering around $2.90kg and killable heifers were going for $2.80kg.

“We had a good line of cows and calves go through at $2000 (per unit), and prices tapered back from there,” he said.

“There is some excellent quality at the moment.”

Mr Daniell said overall prices were firm to up, with heifers the exception.

“We are seeing really good opportunities being missed out on because of the feed,” he said.

“There are a lot of good heifers going for kill because there isn’t feed, and no one wants growing steers because it just costs too much to grow them out.”

Predicting the market to remain firm, Mr Daniell said spring should see an increase in positive attitudes – and hopefully prices.

“Our season around here is green dry – we don’t need a wet winter, we need a wet spring; so we are just waiting for rain,” he said.

More farming news and stories can be read in the August, 2018 print edition of The Southern Farmer or click here to access digital editions.