Markets

Trade steers break through 600¢/kg to outprice lamb

Beef Central, 06/08/2015

LAMB may have lost its reputation as the most pricey red meat – temporarily at least – after some young slaughter cattle indicators surged past their lamb equivalents this week.

Cattle saleyardWhile lamb prices are tracking well above the long-term average, the recent surge in cattle prices is fetching higher c/kg rates, in some categories.

In particular, the national saleyard trade steer indicator* on Monday and Tuesday averaged 611¢/kg carcase weight basis.

With the national saleyard trade lamb indicator** tracking at 589¢/kg over the same period, this is the first time since the end of 2012 that cattle have outpriced lambs, MLA said. Not only has the trade steer indicator gone past the trade lamb indicator value this week, but it is approaching the all-time high trade lamb price level seen back in 2010.

In fact, as illustrated in the graph published below, the crossover in 2012 was relatively short-lived and cattle and lamb prices have generally diverged since 2007.

Trade steer Vs lamb

In comparing the current trade steer indicator to historical values, current prices in real terms (removing the effects on inflation) have not been seen in about 35 years.

The rapid rise in cattle prices is being witnessed across store and finished categories, with all major indicators now at record highs in nominal terms.

The dearest trade steers this week have been in Victoria (638¢/kg), followed by SA (603¢/kg) and NSW (601¢/kg). With most young cattle through Queensland saleyards going to feeder and restocker orders, few trade steers were recorded, but those that were averaged 494¢/kg.

Even the national saleyard heavy grown steer indicator has averaged 603¢/kg this week, with lines in Victoria (647¢/kg), NSW (619¢/kg) and Queensland (494¢/kg) all dearer week-on-week.

So far this week, young cattle markets have also continued to rise, with EYCI-eligible cattle at Wagga, CTLX, NVLX and Shepparton all averaging above 600¢/kg and many other markets just shy of that.

 

* The trade steer indicator includes 330-400kg live weight C3 yearling steers purchased by processors.

** The trade lamb indicator includes 18-22kg carcase weight 2-4 fat score non-Merino lambs. Both indicators represent animals suited for the domestic market.

 

Source: MLA

 

 

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