Post-flood market represents key supply test

James Nason, 20/02/2012

Cattle stranded by floodwaters in western NSW. Picture: NSW DPIThe next few weeks are shaping as a key test of cattle supply, particularly in large areas of Queensland and NSW where extensive flooding has constrained cattle movements for several weeks.

Drier paddocks and the lifting of road restrictions will enable greater movements of cattle to sale or works, however recent price reductions are also likely to weigh heavily as producers ponder whether to meet the current market.

Prices for processing grades have come back by 20-30c in the past month as the impact of a resurgent Australian dollar hits export orders.

Demand for young cattle has also eased, with the Eastern Young Cattle Indicator slipping by 3.75c to 389.25c/kg despite constrained supply, it’s lowest level since August 24 last year.

The EYCI now stands just below its corresponding level of 392.5c/kg level this time last year.

However it is important to note that it is still at historically high levels, standing more than 40c/kg above the five-year average.

National cattle yardings for the first six weeks of this year were 16pc below the same period last year, and 4pc below the five-year average, according to Meat and Livetock Australia;s weekly market report last Friday.

Many producers have been holding cattle for an extended period already due to herd rebuilding and in order to convert grass into heavier weights.

As producers question whether to sell or hold, the need to generate cash flow to service financial commitments will undoubtedly enter the equation.

The lifting of weight limits on the Maranoa River bridge at Mitchell west of Roma last Thursday, which was damaged by recent flooding, has reopened the main access route for western cattle into Roma.

Roma saleyards manager Terry Hyland said he was anticipating yardings of 5000-6000 head in coming weeks. About 1000 cattle from properties close to town were being walked into the saleyards for tomorrow’s store sale, which will be the first weekly store sale at the centre for three weeks.

Elders Roma branch manager Rodney Doig said the next few weeks was shaping as a "confidence game”.

“Ever since the market opened up the first three weeks after Christmas, the cattle market was very strong, but even with the lack of numbers due to the rain, the prices for processing cattle have dropped a fair bit,” Mr Doig said.

“Obviously people are going to have plenty of feed, but whether they panic and take the money in the thought the job may weaken more is the question.

“I certainly think the processors will be hoping there will be a lot of cattle coming forward now there are no road restrictions.

“It is going to be a very interesting couple of weeks.”

MLA said that despite the lower numbers of cattle to market in the past six weeks, the quality of cattle yarded has been been 'good to excellent'.

Heavy grown steers over 500kg have made up 43pc of all grown steer supplies offered in NLRS reported sales so far this year.

Lightweight supplies of grown steers remained limited, with numbers falling by 28pc compared to last year. 

NSW flood update

Moderate to major flooding is continuing at Walgett, with major flooding expected in coming weeks along the Culgoa, Bokhara, Birrie and Narran Rivers.

NSW DPI said the floodwaters were expected to inundate large areas around Walgett, Brewarrina, Bourke, Louth, Tilpa and Wilcannia.

Goodooga and Weilmoringle were also areas of concern.

The department said six helicopters were working out of Moree, Narrabri and Brewarrina last week.

Authorities had completed over 335 tasks including checking on the welfare of stock, removing stranded animals and dropping fodder and feed. 

So far, thousands of stock have been assessed by NSW authorities and around 17,000 head have been moved out of flood waters to higher ground.

Authorities had also dropped some 28 tonne of fodder to stranded animals.



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