Market Morsel: It really hurts
A subscriber asked us to have a look at local cattle prices compared to beef export prices in some of our key trade destinations, as they had been told by beef exporters that margins were tight and trading conditions were very tough at present due to our very elevated cattle prices.
We created a quick index of the EYCI, National Heavy Steer and US/Japanese beef export prices, setting the start of 2000 as the base at 100. Since the start of 2020 domestic prices have well and truly out performed beef export prices to two of our key trading destinations.
While this chart doesn’t highlight the exact trading margins for beef exporters it definitely lends weight to the theory that margins are tight given the extreme divergence between local cattle prices and offshore export prices.