Some of the biggest direct consignment slaughter cattle price rises seen in at least 12 months are evident across parts of eastern Australia this week, as supply challenges push processor competition sharply higher.

Two region-specific causes appear to behind the big movements:

• In southern Australia, it’s simply about greater competition (click here to see earlier report) for a very limited mid-winter supply of slaughter stock
• In Queensland, where July supply is relatively more plentiful, the primary driver is additional competition from southern processors who have been driven north to seek supply, despite the big freight bill to get them home. Queensland-based processors have had to lift rates sharply, as a result of the unusually strong southern buyer presence (saleyards, over the local scales liveweight, and directly out of the paddock). Some observers have suggested the latest round of Queensland over-the hooks rates are designed to drive the southern operators out of their patch.

Beef Central has written numerous times about the presence of up to six large southern processors in Queensland over the past couple of months, described by one northern operator as the most intense southern influence he had seen in the past 30 years.

Regardless, at current rates plus the addition of $150-$180 freight to get the cattle home, southern operators buying out of Queensland currently face an enormous up-front cost. Some of it may be more about preserving a workforce, rather than extracting a margin. History clearly shows that once processing staff start to drift away to other work through lack of shifts, it’s very hard to get them back. Nevertheless, short-term shut-downs may be on the cards at some southern Australian plants, and at least one southern processor is now dropping numbers and shifts.

And with many southern areas not likely to run into increased supply of finished cattle at home for at least two or three months, the pain won’t go away any time soon.

Qld grids rise 30-40c

In southern Queensland, direct consignment grids since Friday from competitive operators have typically risen 30-40c/kg, with good, well-finished heavy cows now on 530c/kg, and grass ox four teeth with HGP now at 590c/kg. On a 360kg ox carcase, that jump represents an additional $180 in producers pockets compared with just two weeks ago, and $150 on a heavy cow. We’ve even seen some one-off ‘special’ offers of 550c/kg on good cows and up to 620c/kg on grass ox this week, but those figures are not representative of the broader market.

The latest round of price rises come on top of a 10c/kg rise in some grids the week before. Beef Central can’t find records of Queensland over-the-hooks prices this high since early last year.

Central Queensland plants are typically 10-20c/kg behind the southern Queensland rates quoted above, and North Queensland, where supply is still relatively strong, is another 20c/kg behind that.

With adequate pasture reserves in many Queensland paddocks, some producers have been able to ‘play the game’ a little in recent times, confident that price rises lay ahead. In this case, money is the only thing that can drag them to market. That’s clearly evident, also, in larger cow yardings seen at many physical sales early this week, with upwards of 1000 cows yarded at Inverell this morning, and solid numbers booked for Roma and Dalby tomorrow.

Compared with only three or four weeks ago, many Queensland beef processors are now far more current in terms of secured supply than they were earlier. Many now have spaces available virtually any time in August, some contacts suggested. Some cattle bought via the saleyards system as recently as yesterday are in today’s kill roster in parts of Queensland.

It’s still too early to gauge responses in terms of additional cattle being booked on the latest round of price inducements, but its fair to guess that many Queensland kill rosters will look more heavily populated by the end of this week.

In southern states, we’ve seen grids this morning in eastern regions of South Australia at 600c/kg on heavy cows, and 650c/kg for a four-tooth bullock, while rates in southern NSW have cows on 590c/kg and 650c/kg for grass ox four teeth. Both are up 20c/kg on last week.

Saleyards show similar price trend

In the saleyards channel, numbers offered were mostly lower in southern markets held early this week. Cow prices continued their recent momentum, with some saleyards cows this week making anywhere from 570c/kg to an unbelievable 600c/kg on the deck (pre-freight).

Numbers at Forbes sale yesterday dropped by one third to 800 head. Quality was mixed, heavy prime cattle were well supplied along with good numbers of cows and feeder weights. Prime grown cattle were 8-14c dearer, heavy steers sold from 280-382c and heavy heifers, 250-372c/kg. Cows held firm, 2 and 3 scores sold from 174-288c and heavy prime cows, 290-314c.

Wagga sale yesterday yarded 3050, down around 600 on the week before. The big standout of the sale was the lack of weight across the offering. Export processors pushed prices higher due to the limited stock available. Cows stole the show with a 10c/kg price increase and more in places. Well-finished cows traded impressively between 330-352c, while the leaner types, making up the majority, sold from 220-330c. Heavy steers and bullocks were in limited supply, fetching from 334-376c. Heavy heifers with good shape attracted a bigger buying group making from 303c to 370c/kg.

Tamworth yarded 1420 yesterday, down 250 on last week. Cows were again well supplied and there was a greater than normal representation of grown heifers. Cattle suitable to processors were well supplied. The demand for well finished cattle from processors was reflected in the market with those going to the trade showing significant improvement.  Well finished heavy weight grown steers with two or more teeth were keenly sought by both export and domestic processors to also show significant improvement. The cow market continued its upward trajectory and showed no sign of slowing, with mediumweights showing some of the strongest improvement. The well finished heavy cows saw a dearer trend with prices as a much as 26c/kg dearer.