A dry winter through southern Australia could spell a tough period into early spring – with both fed supplies and prices under pressure. A tough, dry winter could drop the market by 10-15% by September.
The rain forecast for this weekend across the eastern states. The crops and pastures need a drink and some growth should ensue provided the mild weather holds.
US consumer and retail demand – will they have any cash left over for the rising cost of beef throughout the summer months?
Cattle market seems to be sitting on the fence:
While all the roads led to Rockhampton for Beef 24 in early May, the cattle market lacked direction through Autumn. After a period of volatility and wild swings, the path of the EYCI through Autumn appeared comparatively dull. With Autumn cattle prices starting at 629c/kg cwt, the highest price for the past three months was 631c in early March, to a low of 569c later in the month – a trading range of 62c over the 12-week period.
Given the narrow path walked through Autumn, which way will the cattle market go for the remainder of 2024? If you listened to all the learned pundits at Beef24, there is only one way for the market to go – up! Some pundits expect it to be a slow rise, while others favor a US led bonanza heading towards 2025. Indeed, after attending the Rockhampton extravaganza several times over the past 20yrs, I was struck by a distinct lack of commentary and conversation about the state of the market. Plenty of Agtech, Sustainability and Policies forums, but the state of the market and prices seemed to go under the radar. Or maybe talking cattle prices just isn’t as sexy as it used to be.
As mentioned above, the “bull” case for the Australian cattle market seems to have been very well published. The hypothesis of a steady Australian herd with rising turnoff that will be increasingly devoured by a tight US beef market and strong export demand is a robust one…if not over simplified.
But what should we be looking for on the downside of the market, that could see prices head back toward spring 2023 levels? Several regions have experienced a disappointing spring, with the winter rainfall outlook largely neutral for eastern Australia. Large swathes of southern NSW, Victoria and eastern SA are desperate for widespread rain, along with most of southern WA. The flip-of-the-coin talk of La Nina developing into the second half of 2024 is nice, but a long, cold, and dry winter through southern regions will just leave a “larger deficit” to be made up and plenty of hay being fed out in the meantime.
The export scenario is positive now, but hurdles and disruptions are never far away. Will the consumers in our major markets continue to have the disposable incomes to purchase Aussie beef, let alone beef at all? While global indicators continue to point at headline inflation figures easing, the “cost of living pressures” do not seem to be going away. Anecdotally, the Australian consumer does not seem to have the cash, or appetite, to absorb redirected beef if export markets falter.
A dry winter through southern Australia could spell a tough period into early spring – with both fed supplies and prices under pressure. A tough, dry winter could drop the market by 10-15% by September.
The rain forecast for this weekend across the eastern states. The crops and pastures need a drink and some growth should ensue provided the mild weather holds.
US consumer and retail demand – will they have any cash left over for the rising cost of beef throughout the summer months?
Cattle market seems to be sitting on the fence:
While all the roads led to Rockhampton for Beef 24 in early May, the cattle market lacked direction through Autumn. After a period of volatility and wild swings, the path of the EYCI through Autumn appeared comparatively dull. With Autumn cattle prices starting at 629c/kg cwt, the highest price for the past three months was 631c in early March, to a low of 569c later in the month – a trading range of 62c over the 12-week period.
Given the narrow path walked through Autumn, which way will the cattle market go for the remainder of 2024? If you listened to all the learned pundits at Beef24, there is only one way for the market to go – up! Some pundits expect it to be a slow rise, while others favor a US led bonanza heading towards 2025. Indeed, after attending the Rockhampton extravaganza several times over the past 20yrs, I was struck by a distinct lack of commentary and conversation about the state of the market. Plenty of Agtech, Sustainability and Policies forums, but the state of the market and prices seemed to go under the radar. Or maybe talking cattle prices just isn’t as sexy as it used to be.
As mentioned above, the “bull” case for the Australian cattle market seems to have been very well published. The hypothesis of a steady Australian herd with rising turnoff that will be increasingly devoured by a tight US beef market and strong export demand is a robust one…if not over simplified.
But what should we be looking for on the downside of the market, that could see prices head back toward spring 2023 levels? Several regions have experienced a disappointing spring, with the winter rainfall outlook largely neutral for eastern Australia. Large swathes of southern NSW, Victoria and eastern SA are desperate for widespread rain, along with most of southern WA. The flip-of-the-coin talk of La Nina developing into the second half of 2024 is nice, but a long, cold, and dry winter through southern regions will just leave a “larger deficit” to be made up and plenty of hay being fed out in the meantime.
The export scenario is positive now, but hurdles and disruptions are never far away. Will the consumers in our major markets continue to have the disposable incomes to purchase Aussie beef, let alone beef at all? While global indicators continue to point at headline inflation figures easing, the “cost of living pressures” do not seem to be going away. Anecdotally, the Australian consumer does not seem to have the cash, or appetite, to absorb redirected beef if export markets falter.
