Live Export

Live export prices ease

James Nason, 15/03/2016

 

Live export cattle prices have eased in recent weeks as drier conditions have prompted an earlier start to the mustering season and brought a strong supply of cattle forward relative to demand.

Tight trading conditions for cattle importers in Indonesia and a 4c rise in the Australian dollar in just two weeks are adding further downward pressure on prices.

The consensus from exporters, stock agents and northern cattle producers contacted by Beef Central this week has been that prices for feeder steers have fallen by about 10c to 20c/kg in the past few weeks and about 20c to 30c/lg for cows.

This is backed up by our weekly Live Export Steer price graph on the Beef Central home page, which is compiled by independent market sources in northern Australia. It shows a 20c/kg pull back in the feeder steer price in Darwin from 385c/kg to 365c/kg in the past two weeks.

Livex graph screenshot 15 mar 2016

 

One large-scale producer told Beef Central that the dry conditions in the north have made cattle accessible and a reasonable number of stations are already mustering as a result.

However the monsoon activity currently kicking across the Gulf could disrupt some of that mustering activity as well.

Feedback from Indonesian importers also indicates that higher retail prices for beef in the market is having the effect of subduing demand for beef which in turn is impacting on sales volumes.

This sentiment and the rapid recent rise in the Australian dollar is providing plenty of incentive for cattle and boxed beef importers and exporters to try to pull back rates where they can.

Northern Territory Livestock Exporters Association chief executive officer Stuart Kemp said prices for feeder steers for immediate delivery were still strong despite the softening trend.

He said the impact of the recent sharp rise in the Australia Dollar on the price of export steers would take a few months to play out.

“Most of the cattle for March will have been bought and paid for and contracted,” he said.

“Exporting is international trade so there is always the inherent risk that the dollar will fluctuate.

“Depending on your appetite for risk many exporters will have hedged and locked that money in, and those that didn’t, when the dollar moved up to 75c, they will have copped a loss on that.

“I think sometimes that is overlooked, the risk that exporters do take whenever they enter a contract to deliver cattle.”

Mr Kemp said the large parts of the Northern Territory and Queensland remained relative dry which meant that supply had been keeping up with demand.

“As we get into this second trimester to Indonesia we imagine the trade will be in full swing.

“There will be a lot of cattle around, so prices, a bit like water, will find their own level.

“I don’t think there will be large price falls but prices certainly won’t be at the dizzy heights we saw during the wet season either.”

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