CATTLE prices are on a downward spiral that only rain can alleviate in the short term.
It's the obvious truth, but brutal for farmers caught up in the crashing season and with few options but to sell cattle into a market that is over-supplied, as prices ease on a weekly - if not daily - basis.
Feedback this week is that many abattoirs, and southern feedlots, are booked up well into next month as people try to beat the falling auction system by selling direct. It's a trend feeding into the demise of values and industry confidence as buyers are not having to compete for numbers.
"The supply chain is just overloaded and all the usual outlets are blocked," Rulralco's general manager Peter Homann said.
There were many examples talked about last week of the "knock-on effect" caused by the extreme season that has closed the door on opportunity trading, which, at other times, would have helped support prices.
Ian Geddes & Co agent Geoff McCallum at Deniliquin in NSW said mixed cropping and livestock farmers in the Riverina were being hampered by excessive water evaporation from rice fields, which meant irrigation supplies they had planned to use to kick-start pastures in the autumn were being used up.
Mr McCallum said it had affected buyer demand at Deniliquin's recent store ewe sale, and was also sidelining farmers who may have been tempted to invest in smaller calves at less than $450.
"With the hot and windy conditions, rice is using a lot more water this season so you have this knock-on effect of people not having the water to use in the autumn and they are not willing to take on livestock regardless of the price," he said.
But while it is easy to explain why the market is free-falling, what about the future?
The severity of the price falls for beef are now, perhaps, starting to undermine confidence among farmers that the season is solely to blame.
However, agents remain confident that the market will turn, and quickly, once the season improves.
Mr Homann said farmers should take some assurance from the record level of beef exports last year.
During last year, beef shipments from Australia totalled 963,799 tonnes, according to the Department of Agriculture, Fisheries and Forestry. It eclipses the previous record set in 2008.
"The fundamentals of the beef job are good, and it's not like years ago when we used to talk about just how stuffed the meat market was," Mr Homann said.
"(Exporters) are still selling meat and the outlook for most markets is predominantly strong."
On top of this price, returns for by-products such as offals and hides from cattle have improved.
The latest data from last, puts the potential value of co-products from a heavy grass-fed steer (carcass weight 330kg) at $198.69 a head.
This marks a significant 18 per cent increase on 12 months ago.
Another aspect of the industry southern farmers should take encouragement from, it was suggested, was the strength of cattle prices in Queensland, which is not under the same seasonal stress, compared to the south.
Figures from the National Livestock Reporting Service late last week show an unusual price gap between average Queensland prices and those in Victoria.
AN average saleyard price of 179c/kg for bullocks sold in Queensland, compared to 151c/kg for Victoria; a difference of 28c/kg. This time last year the gap was just 10c/kg.
AN average of 132c/kg for medium weight slaughter cows in Queensland, compared to 111c/kg in Victoria - a much wider gap than last January's 12c/kg difference.
Damon Ferguson, Landmark's new regional livestock manager for southeast Australia (and until recently based in Queensland) said there were some positives, but in southern Australia producers were being swamped by the extreme dry spell and lack of confidence.
Mr Ferguson said there were some reasonable forward price contracts available at 370-380c/kg for 100-day grain-fed cattle, which historically was quite solid.
"Fundamentally things are OK on the outlook," he said.
"The US beef market looks particularly strong and it gives us some confidence that we will see an upside (to cattle prices) with some wet weather."