FIRST impressions aren't always accurate, as the price figures for cattle sold at Wangaratta in North East Victoria last week show.
Wangaratta agents held their annual weaner sale last week where the talk among the crowd was how prices were much more "realistic" and buyers would stand a much better chance of making money compared to a year ago when the sale had been "red hot" and "extreme".
Figures from Wangaratta show on February 4 last year 2442 mixed-sex weaners averaged $758, compared to last week when 2273 calves averaged $703.
So, in theory, buyers are about $55 a head better off than 12 months ago.
The problem is that the financial return for slaughter and feedlot-weight cattle have slumped by a much greater margin, and based on real-time trading, buyers are arguably in a worse position than last year.
For example, last year when calves at Wangaratta averaged $758 the saleyard indicator price in Victoria for heavy steers (600kg) was at 194c/kg liveweight or $1164, according to figures from the National Livestock Reporting Service.
In comparison, this week the indicator price for heavy steers is sitting at 179c/kg or $1074 - so if a producer had sold heavy bullocks and then restocked at Wangaratta their change-over margin would potentially have been worse than 12 months ago.
It is not an isolated case as prices for all grades of slaughter cattle have taken a hit this summer, and the figures from the weekly Wangaratta prime sale compared to the centre's weaner sale sales for the past two years make an interesting snapshot.
Wangaratta hosts a prime market each Thursday.
Last Thursday (before the weaner sale on the Friday that averaged $703), agents sold a mixed offering of 666 cattle (ranging from vealers through to cull cows) for an average of 169.7c/kg liveweight or $771.
Last year on the day before the weaner sale which averaged $758, the Wangaratta prime sale recorded a price average of $869.34 at an average of 180c/kg across 906 mixed cattle.
While seasonal factors and cattle quality make direct comparisons difficult, the argument that store cattle buyers are in a much better position this New Year compared to last season doesn't really stack-up.
All you can say is that in dollar per head terms their investment has been slightly less, which gives them more breathing space and potentially a better margin if the beef market can improve against the high dollar and weak export demand.
The price outlook for beef this year is somewhat divided. In its cattle projections document released late last month Meat and Livestock Australia forecast that cattle prices would "average stable to a little higher" in 2012, provided the season remains OK.
Economists with the National Australia Bank, however, have taken a different view and in its latest Rural Commodities Wrap it has forecast a price correction for redmeat based on greater production out of Australia.
NAB has forecast a 5.6 per cent fall in the Eastern Young Cattle Indicator this year to an average of 375c/kg carcass weight for this year (the EYCI is currently at 394c/kg).
They have based this price correction on an increase in cattle supply, particularly out of Queensland.
The Queensland situation is interesting, as the heavy rain and floods of the past week haven't caused the same reaction as 12 months ago when northern processors offered higher prices to try and coax slaughter cattle into the system.
Over-the-hook price offers for cows and bullocks in Queensland haven't improved at all since the rain, according to NLRS figures, and are in fact at lower levels than in early January.
For example, the current average offer price for slaughter cows in Southern Queensland is 299c/kg, compared to 325c/kg a fortnight ago.
Exporters are opting to pull back production by cutting kill shifts, rather than try and push numbers through while trading conditions remain challenging.
