High cattle values will keep market buoyant: Rabobank

High cattle values will outweigh an expected drop in beef production and keep Australia’s cattle market buoyant, according to Rabobank senior animal proteins analyst Angus Gidley-Baird. Mr Gidley-Baird tipped ongoing Eastern States’ demand for re-stockers to continue to underpin the strong cattle prices offered to WA beef producers. Although national cattle slaughter is predicted to drop by 14 per cent to 7.29 million head this year, Mr Gidley-Baird said cattle producers across WA were upbeat about positive market conditions translating to revenue. “Rabobank’s Rural Confidence Survey, conducted in February, indicated that 62 per cent of WA beef producers believed their farm income would stay the same in 2020,” he said. “Twenty-four per cent believed it would increase.” Positive sentiments have buoyed Australia’s cattle market in the past month, after heavy showers hit many drought-stricken Eastern States areas in February and prompted producers to re-stock. The growing cattle demand has filtered across the Nullarbor to lift the WA market, with Angus heifers topping 410¢/kg carcase weight at the Mt Barker Regional Saleyards last month. Vealer steers have also sold from 286¢/kg cwt to 340¢/kg cwt at the Muchea Livestock Centre, while heifers returned up to 330¢/kg cwt last month. The national saleyard feeder steer indicator averaged 351¢/kg live weight during the March quarter, Meat and Livestock Australia figures show. It marked an increase of 21 per cent on the previous quarter and a 34 per cent hike year-on-year. Mr Gidley-Baird reported in Rabobank’s Battle of the Bulls versus Bears analysis, released last week, that beef farms’ income remained greater than the five-year average despite a drop in revenue. “ABARES farm surveys show farm cash incomes for 2017-18 were down on the previous year, but still above the five-year average,” he said. “Farm business profit also fell and farm debt increased. “Farm management deposits reached a peak in Q3 2018 and were slowly drawn down through the course of 2019, but still remain at high levels.” According to ABARES’ latest data, Australian beef farms’ average cash income increased by an estimated 5 per cent in 2017–18 to about $190,900 per farm.