THE northern live export cattle supply chain is already showing signs of stress as early orders push boat steer and heifer prices in North Queensland to new record levels, and buyers venture further south seeking to secure cattle meeting Indonesian weight specifications.
Agents responsible for two current export orders are offering a record 340c/kg liveweight for steers 260-360kg, delivery Townsville or Charters Towers (depending on exporter) this week. Preg-tested empty heifers (Brahman and Brahman cross) are 310c/kg, also a record.
There’s also clear evidence of challenges in supply, with two previously unseen strategies being devised by supply chain managers designed to meet the supply challenge.
For the first time, agents are offering a price weighed and delivered Rockhampton for live export shipments out of the port of Townsville. Queensland Rural this week has 320c/kg for steers delivered Rockhampton, suggesting a 20c/kg freight differential. Heifers fitting specifications are 290c/kg. Delivery date is prior to January 21.
“Exporters and those responsible for buying the cattle are changing the way the game is played to better accommodate the supply challenges brought on by the prolonged drought and heavy cattle turnoff,” Charters Towers stock agent Shaun Flanagan from Queensland Rural said.
Queensland Rural is currently putting cattle together for two shipments in coming weeks.
Mr Flanagan said similar steers were selling for around 300-310c/kg towards the end of last year. For comparison, the same steers a year earlier (December 2014) were worth just 200c.
“It’s simply supply and demand,” he said.
“While there may have been higher prices paid in isolated individual cattle deals last year, this is the first time that that money has been available on a public offer,” he said.
Feedlots playing growing livex role
Another important development as the strain in procuring eligible weight cattle takes its toll is the growing use of feedlots to add weight to lighter young cattle to being them up to livex eligible weights.
Townsville stock agent Tim McHugh said he had a number of clients with light cattle on feed with the objective of reaching live export eligibility in coming weeks.
“It’s been growing in popularity for the past six months or more,” Mr McHugh said.
One line of live export steers in a local feedlot weighed on Sunday showed an average daily gain of better than 2kg/day. Some lines were showing some compensatory gain, after a tough seasonal start last year.
“A lot of those cattle on feed are probably behind where they would normally be at this time of year, because of conditions last year,” Mr McHugh said.
“But not only is it bumping them up into the live export-eligible weight range – it’s also allowing vendors to ‘buy time’ into a better marketplace,” he said.
“When we put those cattle into the feedlot back in November-December, the market was 300c for steers and probably 280c/kg for the heifers. Not only have they picked up another 80-100kg in liveweight, but the steer price has risen 30-40c/kg since then.”
“Back in November, that steer was hypothetically worth $600 (200kg at 300c/kg). Now we are selling him at 300kg liveweight at 340c, which values him at $1020. Feeding cost deducted from that would be about $200/head, but it represents at least $200 net profit over three months. It’s not a bad punt.”
“Our breakeven analysis on the feeding proposition told us the breakeven on those 200kg light steers was around 285c. Anything above that was profit. I have another 600 going into the same feedlot under the same terms in the next couple of days. It’s been a fantastic move.”
Mr McHugh also confirmed that current public offers of 340c for eligible steers delivered Townsville or Charters Towers was definitely a record. “Go back only 10-14 days and those same heifers were worth only 290c, and 325c for the steers,” he said.
Feedlots involved in current feeding programs for live export include David Cox’s Woodstock yard south of Townsville, and others at Laural Hills and Lanarth near Clermont, Lotus Park and as far south as Barmount Station feedlot west of Mackay.
“I don’t think there would be many feedlots north of Rockhampton that do not have a few live export cattle in them at the moment,” Mr McHugh said.
Queensland Rural confirmed that it too has been buying young cattle and placing them on feedlot programs to lift liveweight into live export range.
In his company’s case, Mr Flanagan said steers and heifers less than 200kg liveweight were being purchased and placed on feed in several Central and North Queensland yards, to bring them up to desirable weights.
“At the moment, if they are worth 340c for eligible steers and 310c for heifers, it might only cost 280-300c/kg to put that weight on, so it does not actually cost them anything to do it,” he said.
Queensland Rural is currently offering the same money delivered the feedlot for light cattle as what’s on offer for boat cattle – 340c for the steer and 310c the heifer.
- Producers interested in the details on the orders for export-ready or feedlot backgrounder cattle can contact Shaun Flanagan Queensland Rural on 0429 147 150.