Market Talk - Trump's tarriffs a boost for beef

Cattle prices continue to hold fully firm or in places improve a few cents over the last week in most saleyards with cow prices in the southern markets being the highlight.

Heavy cow averages in Victoria are sitting around 416c while in South Australia it is 404c, NSW 397c and in Queensland 360c/kg liveweight.

This big difference between Queensland and the Southern States has been the case for many months based mainly on supply and this is why some Victorian works are buying cows out of Queensland.

All reports indicate that the US herd has not started it’s re-building phase yet and even when it starts it will take another two to three years before we see the effect.

The other thing in Australia’s favour is that our major competitor in the US market is Brazil and at the moment that competition is almost non-existent with Trump’s tariff on Brazilian beef sitting at 76.4 per cent.

How lucky are we.

Since the tariff war started beef trade around the world has been disrupted and before this started China was the third biggest customer of US beef.

But of course all that finished when China delisted all American abattoirs.

In a strange way that has benefitted the US as more beef remained in it’s local domestic market.

The other side of all that is that China had to find beef from elsewhere which has helped Australian beef exporters selling into China.

The current national cow indicator in Australia sits at 373c/ kg which is close to the all time highs set in 2020 and 2021. Feeders and restockers are keeping the young cattle market strong with plenty selling from 440c to 520c and restockers paying up to 600c for lighter steers.

This competition is in turn keeping pressure on domestic buyers and smaller butchers and I am hearing that small suburban butchers are starting to struggle with these higher beef prices coupled with record lamb prices.

There are plenty of stories of these butchers’ lamb sales halved as customers adjust to higher prices.

Although lamb prices have come off the extremes of recent months, they are still very good with most well finished lambs making 1050c to 1200c/kg car cass weight which in turn is giving restockers and feeders the confidence to pay record money for new seasons lambs to go back to the paddock and feedlots.

We are seeing these lambs making $170 to $230/head and lighter store lambs $120 to $160/ head in interstate saleyards.