Cattle price follows east coast
After months of buoyant prices, the WA cattle market is tipped for a fall in the foreseeable future, in line with trends in the Eastern States.
According to Meat and Livestock Australia market analyst Ben Thomas, a poor July to September rainfall outlook for southern Australia has resulted in a number of minor revisions in the MLA 2017 Cattle Industry Projections.
Mr Thomas said the downturn was fuelled by a dry autumn, 20-year low cow and heifer slaughter as well as volatile global market activity.
“The slowly building national cattle herd indicates the peak of the cattle price surge is more than likely behind us, and downward pressure will continue to slowly mount for the foreseeable future,” he said.
“Despite this, Australian cattle prices are unlikely to drop back to pre-2013 levels, buoyed by some lingering restocker activity when pasture conditions eventually improve, along with the unlike-lihood of a strengthening Australian dollar and reducing tariff regimes into Japan, Korea and China.”
Mr Thomas said the end of the financial year saw the downturn.
“Cattle slaughter numbers consistently tracked higher than year-ago levels for the first time in three years, while at the same time, cattle prices dropped below year-ago levels, also for the first time in three years,” he said.
“These trends are likely to remain in place for the remainder of 2017 and have a significant impact on price and production expectations.
Blythewood Pastoral co-principal Leigh McLarty, of Pinjarra, agreed beef prices in WA would continue to see a correction, but he hoped it would not lead to a crash similar to what happened in the 1974-75 period.
“It is understandable that beef prices have been too strong for the world markets,” he said.
“This is the correction we had to have so the industry can function.
“Grinding-beef demand from the US is not as high as two years ago.
“We have 200 head of cattle off grass to market over the next month and are expecting an 80c/kg drop in prices at around $5/kg for 280kg to 290kg dressed weight.
“It’s been a tough season with the late start and our fertiliser costs have gone up 15 to 20 per cent.”
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