Australian sheep and cattle markets finally rally after dismal year

Livestock markets are finally kicking back after a dismal year, with a major nationwide lift in sheep and cattle prices giving WA producers a much-needed confidence boost.

Prices for prime and store livestock have risen significantly since early November on the back of late spring rains in key production regions including WA’s South West and south coast.

The rains have fuelled pasture growth, giving restockers the confidence to enter the market, and allowing graziers to hold on to livestock they had, until recently, been desperately trying to offload.

The benchmark Eastern Young Cattle Indicator shot up 176¢/kg during November — a 46 per cent increase — to close the month at 562.7¢.

After starting the year at 850¢ and bottoming out at 349¢ in late October, the EYCI had climbed to 571.9¢ on Monday.

Its WA counterpart, the Western Young Cattle Indicator, rose just 4.4¢ during November but finished the month at 445.6¢, after dropping to a low of 381.7¢ nine days earlier.

The WYCI, which began the year at 794.5¢, had climbed back to 466.7¢ at the start of the week.

Meanwhile, WA lamb prices have lifted prices about 40¢ across the board in recent weeks, to about $4.80/kg, according to Agora livestock analyst Rob Kelly.

“The main thing we’re seeing at the moment is a shortage of heavy lambs — the processors are looking for lambs around the 20+kg HSCW mark and they just don’t exist at the moment in any significant volumes,” Mr Kelly explained.

“There hasn’t been a lot of feed around, so people with lambs on grass were just not getting up to weight. Also, the prices earlier in the year weren’t there to incentivise producers or feedlots to put their stock on pellets or grain.”

Mr Kelly, who farms at Kojonup in WA’s Great Southern, said the shortage was driving up prices.

“The processors are finding all the bookings they thought they had for lambs now don’t exist, so they have these gaps in their supply chain,” he said.

He predicted lamb prices would continue to “stay well supported” , but said mutton continued to be a hard sell due to the low margins on offer.

“It’s just a case of processors and feedlots doing everything they can to pull everything out of the supply chain — any lambs that they didn’t know about,” Mr Kelly said.

“A month ago, if you had called a processor and said ‘I want to send in 50 lambs’, they’d tell you to get in line — and that line was pretty long — but now, they’d say ‘how quick can we have them?’”

Cattle prices were following a similar trend and Mr Kelly did not expect a return to the rock-bottom prices of earlier this year.

Meat and Livestock Australia market analyst Ripley Atkinson said there had never been “a more seismic shift” in the confidence of Australian cattle producers, in such a short time, as had played out in 2023.

“At the market’s lowest point in mid-October, prices ranged anywhere from 58 per cent to 70 per cent lower than year ago levels, and anywhere from 32 per cent to 52 per cent lower than 10-year averages,” he said.

“The same prices 12 months earlier were all above five and 10-year averages by some margin. This gives context to how significant the decline in price has been in 2023.”

Mr Atkinson said 2024 was shaping up to be an “extremely positive” year.

“With recent rain, falling retail prices, strong exports and rising processor throughput, the outlook for the sector remains exceptionally strong,” he said.

Rabobank senior animal protein analyst Angus Gidley-Baird said the rising prices were “a clear indication” of how much influence producer sentiment was having on the market.

“On the back of this rain, we believe prices will level out at current levels for the next month or two, but it remains highly contingent on rainfall,” he said.