(Bloomberg) -- Australia's benchmark cattle price index surged to a record as slaughter rates plunged amid reduced processing capacity and tightening supplies.
The Eastern Young Cattle Indicator climbed to $7.76/kilogram ($5.57) on Wednesday, according to Meat & Livestock Australia. The highest-ever price came as the slaughter rate slumped 30% year-on-year in the week ending August 14, MLA said, when the fewest number of cattle passed through eastern states meatworks in a winter week since August 2008.
The lower “turn-off” rate has been “exacerbated by reduced processing capacity and a tightening supply of finished cattle across the eastern states,” MLA said.
Cattle producers have been holding back livestock to restock their herds amid optimism over solid rainfall in many parts of the country after several years of drought cut headcount.
Meanwhile, Victoria has curbed meatworks' processing capacity to try to stem the spread of coronavirus during a strict six-week lockdown. Meat giant JBS's Australian unit said it's shuttered the state's biggest meatworks until community transmission of the virus has been controlled.
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