Beef price to fall from record highs: TEM's Matt Dalgleish
The beef price in Australia rose to 1042.28 on the EYCI (Eastern States Young Cattle Indicator) on Monday, yet another Australian record high - but Thomas Elder Markets' Matt Dalgleish says the bull run won't hold into 2022/23.
The EYCI Indicator is a gauge of pricing for general cattle markets in Australia and is calculated based on a seven-day rolling price average expressed in cents per kilogram carcase weight.
Despite the latest market trends, farmers can be wary but consumers can breathe a sigh of relief when it comes to projected long-term trajectories for Australian beef.
Speaking with Flow last week, commodity market analyst at Thomas Elder Markets, Matt Dalgleish, said that he projects prices for Australian beef to fall by the 2022-23 period:
“As we move into next year, domestically we are in a herd rebuild, so we are going to see an increase in the herd over this year and what comes with that is obviously as the herd gets bigger, we’ll start to be able to see our slaughter numbers increase.”
“…that is going to lead to some price pressure – we’re not talking a market crash but probably talking a reduction in pricing into 2022-23 of 5-15 per cent from these current levels.”
Dalgleish, who co-owns a pig farm near Bendigo, attributed the recent market spikes to ‘supply disruptions’, citing issues in South America as one of the reasons for Australian beef prices spiralling into unprecedented levels.
“There was a couple of things internationally that allowed pricing to lift a little bit in the last month or so…we did see a bit of a supply chain disruption to Brazil…a couple of outbreaks of mad cow disease and that impacted their ability to export and then a few of the big destinations for Brazilian beef decided they were going to hold off.”
The EYCI's bull run looked over in early September, but picked back up again within a week and has kept climbing into further record territory:
Matt Dalgleish has noted the cattle market's strength is hitting the processing sector, with slaughter numbers struggling in Victoria.