Rain has shifted restockers into a little bit more action in the north, delivering a slight uptick to some national cattle market indicators and holding others steady, but the threat of a dry spring is hanging very heavy over all heads.
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In the south, the rain hasn't excited restockers much at all. In places it has had the opposite effect because too much has arrived, agents reported.
Across the board, the 'wait and see' sentiment remains firmly in place, with a number of factors - most notably the forecast for far dryer conditions - weighing heavy.
Analysts say the advent of El Nino on top of the increased supply of cattle for slaughter that the rebuilt herd is now delivering could add up to a very tough situation for the cattle market.
They hasten to add that is the worst case scenario but it does seems to be dominating thoughts whenever cattle prices are discussed.
Mecardo analyst Angus Brown said a dry spring on the back of rapid herd growth would be bad news for prices.
"Add the issues the processing sector has had in finding staff to increase kill rates, and we could be in the perfect negative price storm," he said.
But if rain turns out to be reasonable for the rest of the year, and there is slow growth in slaughter capacity, prices could hold or even move higher, he said.
Elders agent Oliver Mason, who operates in both NSW and Victoria at Wangaratta and Albury, said even on the current lower rates, local producers were 'reluctant to fire'.
"It's a combination of having what they need, scarring carry-over from last year's trading and general concern about what's to come," he said.
"Basically, they want to see more optimism in kill cattle before they step in."
Analyst Simon Quilty said the likelihood of a national herd liquidation was now a real possibility over the next year if El Nino occurs.
"The Queensland concern is that the expected dry conditions could see the rebuild run out of puff when it only just got going after a stagnant 2020 and 2021 period," he said.
"Concern has been for the Roma district to the NSW border, and west, that has missed the wet season. Further south in NSW, western areas also remain dry."
Meat & Livestock Australia market information analyst Jenny Lim said restocker buyers were keener at Roma and Dalby over the past week on the back of the rain.
There were nearly 1000 head more of restocker yearling heifers and just under 600 more yearling steers on offer last week, yet the restocker yearling heifer indicator improved, she said.
Rural Bank's Australian Agriculture Mid-Year Outlook 2023, released today, forecasts cattle prices to remain softer in the coming months as supply remains constant.
"Seasonal conditions will be the key influence on supply as producers weigh up whether to hold onto cattle or sell given the current drier outlook for the remainder of the year," senior agribusiness relationship manager for Queensland Mark Pain said.
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Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
