Cattle market continues upward trajectory

MARKET WATCH: Peter Cabot of Nutrien Wagga. Picture: Karen Bailey

MARKET WATCH: Peter Cabot of Nutrien Wagga. Picture: Karen Bailey

CATTLE prices are in the best shape in history. However, for restockers it might not be the brightest news to hear.

Every indicator has broken new ground in recent months and saleyards are offering a degree of competition which is pushing prices into record territory.

That combined with a good seasonal outlook has instilled confidence right across the beef industry.

However, for those wanting to enter the industry and purchase cattle it could be a tricky road ahead.

Nutrien Wagga, livestock manager, Peter Cabot said obviously the cattle market was at a historic all-time high.

"As far as restocking goes, anyone who has sold cattle in the last couple of months would be able to restock while the market is at these high levels," he said.

"For anyone who is trying to get in from a standing start it would be very brave to hop in at these high prices," he said.

Mr Cabot said the national indicators were being clearly reflected at the Wagga cattle market each Monday.

And in terms of leading the high prices saleyards have certainly claimed the spotlight.

"Saleyards are leading the charge, in a lot of cases it has been dearer than over the hooks, that is why we have been yarding so many," he said.

In addition to high cattle prices the season has shown plenty of promise.

"There are people around here saying it is the best spring they can remember," Mr Cabot said.

The sentiment in the Riverina has been reflected in the latest NAB Rural Commodities Wrap which details what 2021 might look like for cattle prices after the Eastern Young Cattle Indicator (EYCI) cracked the $8/kg mark for the first time around a month ago, and has consistently remained above that mark since.

NAB Agribusiness Economist, Phin Ziebell, said with cattle numbers so low post-drought, prices have responded sharply.

"While current prices are great news for people who managed to hold cattle during the drought, those forced to largely destock in the 2018-19 period are now buying into a red-hot market," Mr Ziebell said.

"Processors also face major challenges finding quality stock at profitable prices.

"Looking ahead, while it is entirely possible that the EYCI will reach $10/kg in early 2021, it is not our central forecast and it is likely to be unsustainable.

NAB Business Bank Executive, Central Queensland, Darren Kuhl, said extremely high prices have been driven by lack of supply following massive destocking in 2018-19.

"The high prices also reflect the historically low breeder numbers, resulting from the female portion of total kill rates outweighing the male portion in the last few years," Mr Kuhl said.

"The promise of La Nia has also impacted supply and we're seeing a lot more producers who may have originally reduced stock, hold on as long as they possibly can in anticipation of the La Nia event.

Overall, the NAB Rural Commodities Index rose 4.7 per cent in October, the best monthly result since March 2020, reflecting Australian agriculture being in the strongest seasonal shape since 2016, but with generally better prices.

Meanwhile, vendors will offer 3091 head at the Wagga Livestock Marketing Centre on Monday.