Beef prices on upward trajectory

He said the Eastern Young Cattle Indicator - the benchmark of Australian cattle prices - had scaled up to 591.25 cents a kilogram at the close of last week.

"That's just phenomenal considering where the EYCI was in the same week last year, at 359c/kg," he said.

"It's largely driven by overseas demand and we've got some factors that are really working in our favour.

"Firstly, the $A has gone from US 81c back at the beginning of 2015 and it's now at about US70c. It just makes us much more competitive."

Mr Thomas said there was more good news on the $A front.

"The $A is forecast to be US66c at the end of this year and US60c at the end of next year," he said.

"Where we are currently, at about US 70c, the $A is the lowest it's been since the global financial crisis in 2009.

"If it gets to US60c it will be the lowest it's been since 2003. That makes Australian beef so much more competitive."

Mr Thomas said overseas demand was filtering through the supply chain, leading to high prices at the markets.

"A big part of that is the US market, which actually has declined somewhat, but it's coming off an incredibly high base," he said.

"The prices over in the US are still really high. We're also seeing quite strong demand from China, Japan and Korea."

Although there was much media coverage about China's declining economy recently, it had not affected the beef trade.

Mr Thomas said the volumes going to China were the same as this time last year.

"While that strong international demand is a significant aspect to strong saleyard prices, feedlots across Australia are as full as they have ever been and that's also been a big component driving the EYCI to where it is at the moment," he said.

But restocking activity is not so buoyant.

"One area where there is still very little interest is from the restocking buyer," Mr Thomas said.

"While feed and weather conditions have improved in some restocking areas, our largest cattle producing areas have seen little restocking activity.

"While NSW is not having too bad a year, some areas are still in need of a drink and, Qld, which is a large driver behind the market, is still generally very dry."

There has also been a slowdown in the number of cattle being processed in the past few weeks, with 155,000 head processed last week in the eastern states, coming off a high of 180,000 a week in April.

"Since April the number of cattle being processed has started to edge lower," Mr Thomas said.

"Last week it was 155,000, which is still above average."

Mr Thomas said cattle producers should look ahead with confidence.

"Producers with cattle to sell can have confidence the market should at least hold," he said.