Positivity is key for the survival of rural communities

Recent rainfalls across many parts of the eastern states has seen domestic livestock markets open 2020 in a strong space.

Store lambs are well over the lofty heights of July 2019, when all the record heavy lamb prices were broken.

Cattle prices have skyrocketed, last week on AuctionsPlus we offered more than 18,000 cattle in what looks like Australia’s largest public cattle auction ever.

Livestock numbers didn’t dampen the sale, seeing a top price of 669 cents a kilogram live weight for 122kg Angus steers from Moulamein, NSW.

At a national level, Meat & Livestock Australia have reported the Eastern Young Cattle Indicator has pushed through the 700c/kg mark to reach 701.75c/kg cwt.

While, the Trade Lamb Indicator is currently sitting at 887c/kg cwt, 225c/kg above the same point last year.

Some regions, particularly across the Northern Tablelands of NSW, are reporting that they have received more rainfall in 2020 than they did for the whole of 2019.

So, with all these records tumbling and a lot of positivity around the industry what does the rest of 2020 look like?

Every grower, producer, agent, buyer or broker that I speak to can’t give an answer, and rightly so, to predict or forecast the market accurately is extremely hard.

Not only does one have to take into account their local climatic forces, but also overseas infectious disease outbreaks, political trade wars, and the rise and impact of plant-based diets.

So, rather than try to predict what will actually happen, I feel it’s worth noting factors and influences on the market that growers and producers should be aware of.

Initially, the lack of stock around will forces prices upward.

MLA sheep and cattle projections were released in early February.

The cattle herd is expected to fall to its lowest point since 1992, and by June 2020 fall by 6 per cent to 24.7 million head.

On the sheep front, MLA has predicted the national flock to fall by 3.5pc to 63.7 million head, its lowest level since 1904.

It has been evident that the scarcity of numbers is drawing producers to buy.

Feeding stock is on an upward trend.

The number of cattle on feed has been over one million for the seven consecutive quarters, online on AuctionsPlus there has been extreme demand from northern NSW and southern Queensland feedlots.

However, surely these record prices will see feedlots become wary of not being caught with overpriced stock.

The number of grower set-up lamb feedlots is also seeing a strong store lamb market.

Online we have had a record number of unique buyers on the platform, and reports from saleyards are no different.

The drought has seen growers become much better at feeding stock and people will use these skills as a value to their enterprise.

The coronavirus is the hot topic at the moment.

Anyone moving meat into China is having difficulty trying to deliver a product that’s currently on the water down the supply chain.

Reports of staff not turning up to work in many sectors are slowing the movement of stock.

What’s more, confidence in the general economy is weakened, which is hurting all markets.

African swine fever has forced prices up, but if stock can’t be moved, it won’t make a difference.

Mutton and cull cows getting sold into China are on a thin line.

If they cannot be moved, the market will step backwards unless restockers pick up the slack.

If these market impacts and statistics interest you, I would highly recommend you subscribe to both the MLA weekly reports and longer-term projections, and Mecardo market analysis.

Overall the outlook for 2020 is positive, and this positivity is key for rural communities to survive.

Many people still haven’t had drought-breaking rain, but at least there is a market for them to meet when they eventually sell stock.

As one livestock agent commented, “I can’t take a bad phone call at the moment, after such a tough 18 months people are ready keen to jump back into the market”.