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Friday, May 15, 2015

Cattle ahead but lambs not far behind in Victoria

By Augusto Semmelroth  |  Source: MLA's NLRS

After a patchy autumn break in April, most livestock producing areas in Victoria are finally experiencing more favourable seasonal conditions. Livestock markets have responded accordingly to see a solid price recovery in recent weeks and most cattle categories moving above their February highs. Lamb markets have also made a strong comeback, with prices up 10-20% in the last four weeks.

Key points:

  • Livestock markets lost momentum in February and saw a minor price correction on the back of record supply levels and deteriorating seasonal conditions across the east coast.
  • The hope for a favourable autumn break in April fell short of expectations in many areas in Victoria, particularly compared to NSW. Yet, conditions have finally started to improve in recent weeks.
  • As a result, Victorian cattle markets are finally catching up with their NSW counterparts to finished steers up 15% on late March levels. Feeder steers have outperformed finished lines and rebounded 21% during the same period.
  • Although most cattle lines remain 10-25¢ below NSW levels, they have also set new record levels over the last two weeks. Prices currently range from 460¢ (medium steers) to 471¢ (trade steers), and heavy steers at 473¢/kg cwt.
  • Feeders have well and truly broken the 250¢/kg lwt mark for the first time to finish last week quoted at 260.4¢/kg lwt. This shows how robust lotfeeder demand currently is.
  • Cows have gained 64¢, or 18%, to 410¢/kg cwt.
  • In percentile terms, all cattle categories are at, or virtually at, their 100th levels.
  • Lamb markets have also risen since late March, and are now around 15% higher.
  • At 575¢/kg cwt, trade lambs in Victoria are at the highest level since February. They are also faring better than heavier lines, suggesting domestic demand remains firmer while the export supply glut slowly unwinds.
  • Although the best performers in April, merino lambs are still tracking behind crossbreds in percentile terms. Prices are also around 20¢ below NSW quotes and that may be because of the more benign rainfall conditions seen in southern NSW so far.
  • As in NSW, mutton markets remain undervalued compared to lambs (percentile terms), but should have more upside in the months ahead should seasonal conditions remain favourable.
  • The 95th percentile for mutton is around the 450¢/kg cwt mark, which seems to be a plausible target level for late June and July.

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 

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