After a non-stop shopping spree out of northern Queensland during the past two years, live exporters are finding it harder to source the cattle they need to fill orders to Indonesia and Vietnam from the drought-affected region.
For much of the past two years a single order was all that was required to fill the larger 20,000 head live export vessels out of Townsville.
But in a sign that supply is tightening, it is now taking two or three orders to secure the required numbers, while demand and prices for export heifers are also on the rise.
Cloncurry livestock agent Peter Dowling, Dowling Livestock & Property said live export prices usually dip at this time of year as dry season mustering programs push large numbers of export cattle onto the market.
But successive failed wet seasons meant the dry season turnoff had continued largely unabated in recent years without the usual end of year break.
“The big run of cattle that starts coming out of Queensland from April through to June isn’t coming this year because for all intents and purposes it has already been,” Mr Dowling said.
“There was no stop for two or three months for a wet season, it has been a continuous supply, so instead of going down at this time of year the price has actually held where it was April.”
Cattle in the 450kg range for export to Vietnam are becoming much harder to source out of the dry region, which is putting upwards pressure on prices for those categories.
At current rates producers are receiving $2.30-$2.35/kg for slaughter-weight steers to Vietnam ex-Cloncurry, and $2.20-$2.25 for feeder steers and $1.90 for heifers.
The rise in export demand from Indonesia and Vietnam over the past two years has been perfectly timed for producers across Queensland’s drought-stricken north west.
Both markets have provided an opportunity for producers to turnoff cattle and lighten stocking pressure at prices that would not have been available from the domestic market during that time.
Prior to the return of strong Indonesian demand and the emergence of big orders from Vietnam, producers in the region were receiving around $1.50-$1.60/kg for two year old, 400kg cattle, or around $600-$650/head, Mr Dowling said.
Now a 300kg feeder steer at $2.25/kg can return $675/head, while those lucky enough to have heavier steers at around 500kg can return $2.30/kg or $1150 a head – more than older bullocks have been worth for much of the past 20 years.
“If we could just get a season where people could take a bit of advantage of getting a weight gain on their cattle, we would be making some money,” Mr Dowling said.
Another stock agent in north Queensland told Beef Central this week that prices were on the cusp of a rise, based on the continued strength of export demand versus tightening supply in the region.
Prices for export heirfers were also on the rise, reflecting the difficulty that exporters are having in finding steers to suit export orders.
One order currently being filled for shipment from Townsville to Vietnam next month is advertising prices at $2.35/kg for steers and feeder bulls and $2.15/kg for red heifers – the heifer price up from around $1.90/kg.
Are exports from Port Alma on the cards?
The dwindling supply of cattle across the north also raises the prospect that it may not be long before the economics favour filling live export vessels at ports in closer proximity to larger numbers of suitable cattle, such as Port Alma near Rockhampton.
Beef Central understands that all of the infrastructure and regulatory approvals required for exports to proceed from Port Alma are already in place.
All that is needed for a shipment to commence is for an exporter who believes the numbers stack up to make a formal application to the Federal Government for a permit to export from the port.
The Department of Agriculture told Beef Central this week that it has not yet received any applications to export livestock by sea from Port Alma.
A spokesperson said the Australian Government “fully supports” the expansion of the live animal export trade from Port Alma, but could not comment on the state of commercial arrangements for cattle exports from Australia because these were managed by exporters and premises operators.
“Should an application to export livestock by sea from Port Alma be submitted, the department will consider it in the same way as one to export livestock from other ports around Australia,” the spokesperson said.
A spokesperson for Queensland minister for agriculture Bill Byrne said the issue of live cattle exports from Port Alma was entirely an issue for the Federal Department of Agriculture.
Prior to being appointed agriculture minister in the newly elected Palaszczuk Labor Government in February this year, Mr Byrne, who is also the State member for Rockhampton, spoke out against proposals to commence live exports from Central Queensland, arguing that the move would negatively impact on meat processing operations in Rockhampton.
Soon after taking over as agriculture minister Mr Byrne issued a statement voicing his support the live cattle export sector and stating that he fully recognises the trade’s value to the beef sector.
However he said at the time that on the evidence presented to him by meat processors in Rockhampton, he could not support the establishment of live cattle exports from Port Alma.
“I am not satisfied it is a viable economic proposition,” he said.
“I again make it clear that I strongly support live exports and that my views on the Port Alma proposal do not diminish my support for the live exports industry for Queensland producers and graziers in any way.
“Up to 2,400 jobs in my electorate of Rockhampton are dependent on the meat processing sector and I can’t support any proposal that might place those jobs in jeopardy.”
While the Federal Government has the authority to issue live cattle export permits, the Queensland Government owns the Gladstone Port Authority which is the port authority for Port Alma.
However a spokesperson for Mr Byrne’s office told Beef Central yesterday that the issue of live cattle exports from Port Alma was entirely an issue for the Federal Government to consider if and when export permit applications were received.
In the meantime the livestock export industry continues to await confirmation from the Indonesian Government of the import permit allocation for the third quarter which begins next Wednesday, July 1.