While the cattle market was largely steady this week, lamb prices edged lower as supplies remain high, with prices back across all categories.
As national lamb yardings jumped 5% this week, to 173,536 head, trade lambs averaged 13¢ lower, at 364¢/kg cwt, while heavy lambs declined 9¢, to 373¢/kg cwt.
The EYCI finished Thursday slightly higher on last week, at 353¢/kg cwt, while heavy steers nationally remained unchanged on last week at 335¢/kg cwt.
The one mover this week was cows, finishing the week 5¢ higher, at 275¢/kg cwt.
Reviewing the performance of the major beef exporters in recent months demonstrates how much influence currency can have on trade flows and the competitive position of each supplier’s product.
While Australian exporters continued to battle with the A$ around 103-104US¢ this week, constraining export returns, the benefit to the Brazilian industry from a devalued currency was evident during September.
In September, Brazilian beef exports topped 90,000 tonnes swt – going a long way to explaining the lower than expected performance of Australian beef exports to Russia for 2012.
Interestingly, the last time monthly Australian beef exports surpassed 90,000 tonnes swt was in October 2008, which was in the immediate wake of the A$ plunging to around 60US¢.
Additionally, the US industry has been able to gain competitive advantage throughout 2012 from their weak currency.
However, it should be noted that some of the advantage gained by the US from its low dollar in recent times has started to be eroded by the flow-through impact of higher production costs and cattle prices in the US market itself.
The high A$ has also impacted the return Australian exporters have been able to gain for lamb in overseas markets, despite volumes continuing at record levels.
This has also been the case for NZ lamb exporters, where the historically high NZ$ has stymied shipments into Europe.
Source: Argentine Beef Packers S.A.
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