Squeeze on WA cattle market

Continued demand for export beef, falling herd numbers and demand from re-stockers in the eastern states is likely to increase the Eastern Young Cattle Indicator (EYCI) 5 per cent year on year in 2011.

This is the latest prediction by the National Australia Bank (NAB) Rural Commodities Wrap which says the EYCI has consistently stayed around or above the 400c/kg mark in 2011, hitting an all-time high of 424.5c/kg cwt last month.

Although the $A is now at record post-float levels and is being tipped to possibly increase, the decline in global beef supplies combined with robust international demand is expected to offset the pressure on the export market.

Domestically, competition from all sectors is set to remain fierce, as a result of the much better season in eastern Australia.

With plenty of water and feed available in most regions, the pursuit of cattle will be driven by restockers, maintaining pressure upon the EYCI.

This search for cattle could lead to a bidding war between southern beef producers and northern Australian live exporters.

Flood-damaged crops are expected to create an excess of stockfeed in southern states, driving buyers from the south to Queensland, the Northern Territory and WA in search of cattle.

Elders WA livestock manager Paul Mahony said cattle prices would remain strong in WA this year simply due to increased demand.

Mr Mahony said WA was only one or two good rains away from producers in the south entering the restocker market.

He said there was still interest from eastern states buyers at WA saleyards, however the price of cattle would dictate how long this interest would remain. “Once we have received a break we will start to see increased competition from restockers here,” Mr Mahony said.

“We are seeing northern cattle producers looking for breeding cattle now following good rain, cattle are being sourced from the Kimberley, some from Queensland and also southern markets.”

Mr Mahony said both live export markets and increased processing capacity which had opened up in the spring of last year were still strong and this was adding further confidence to the WA beef industry.

He said that already this year the Western Young Cattle Indicator had risen between 10 to 20 per cent over last year’s prices.