THE decline in Australia's beef cattle prices showed no sign of abating this week, with even a sharp drop in supply volumes failing to prevent price falls across the board, Meat & Livestock Australia reports.
National yardings fell 24 per cent compared with last week. The seasonal flush of young cattle, deteriorating southern pastures, and weakening export demand have pushed prices down 10-15 per cent from their September peaks, MLA said.
A rolling seven-day benchmark Eastern Young Cattle Indicator fell 15 cents in the week ended Thursday to A$3.22 a kilogram estimated carcass weight, up 46 cents on year.
Still, MLA said the cattle price decline could overshoot, with global markets expected to recover from early 2009 as import stocks are run down and if the Australian dollar exchange rate remains low.
"This market has the propensity to overreact to the temporary disruption in global trade caused by the financial crisis, particularly with the season working against many southern producers," it said.
The Australian dollar has declined around 35 per cent against its U.S. counterpart since midyear.
Australia is the second-biggest exporter of beef after Brazil, with shipments in 2007 reaching 941,419 boneless metric tons valued at almost A$5 billion.
Around two-thirds of Australian beef production is exported, making export demand an important driver of prices in domestic saleyards.
Prices in Japan for Australian chilled grass-fed fullsets fell 9 cents this week to settle at US$2.72 a pound, including carriage and freight, up 21 cents on year. A fullset comprises about a dozen different cuts of beef.
The estimated free-on-board price for this product in Australia was quoted at A$5.70/kg, down 41 cents on week and up 61 cents on year.
In Australia, a national price indicator for Japanese ox grade of 500kg-600kg estimated carcass weight fell 9 cents to A$3.25/kg, up 30 cents on year.
In the U.S., Australian frozen 90 chemical lean, or CL, cow beef fell 7 cents to US$1.31/lb, including carriage, insurance and freight, to rise 5 cents on year.
The free-on-board price in Australia for this product fell 35 cents to A$3.85/kg, up A$1.15 on year.
In Australian saleyards, a national price indicator for U.S. cow grade of 400kg-520kg fell 16 cents to A$2.69/kg estimated carcass weight, up 27 cents on year.
A national price indicator for trade steers of 330kg-400kg fell 11 cents to A$3.29/kg, up 32 cents on year.
An Australian national price indicator for a medium steer of 400kg-500kg fell 12 cents to A$3.15/kg, up 29 cents on year.
An indicator for feeder steers of 330kg-400kg fell 7 cents to A$1.66/kg, up 15 cents on year.
-By Rachel Pannett, Dow Jones Newswires
