Markets

Bigger premiums evident for MSA cattle

Jon Condon, 05/03/2013

 

Widening premiums of up to 30c/kg carcase weight are evident for MSA cattle in over-the-hooks markets this week, driven mostly by supply issues.

Some southern Queensland processors lifted their MSA grids a further 5c this week, with offers of 355-365c for MSA steers in evidence.

That compares more than favourably with milk and two-tooth heavy steers on the same processors’ grids quoted at 335c/kg this week – a full 30c advantage for MSA-eligible cattle.   

One of the nation’s largest red meat wholesalers told Beef Central this morning that there was distinct lack of MSA and better yearling beef in the supply pipeline at present, particularly for lighter descriptions.

“Because of the recent dry conditions pushing cattle to market, we’ve been killing too many of the wrong sort of cattle recently, including more cows,” the wholesaler said.

“That’s now being reflected in higher prices for good YG and MSA beef, and for the cattle to supply that product.”

An easing in kills in southern Australia as the normal seasonal turnoff cycle slows down had also contributed to short MSA supply, he said.   

The National Livestock Reporting Service confirmed that larger price differentials were being seen for MSA in some regions this week, suggesting over the hooks figures of 365c/kg in Queensland and around 355c/kg in southern areas were evident in the market. At other times of year, those MSA premiums can drop away to 10-15c/kg.

One southern Queensland processor suggested yesterday that there could be a ‘pool’ of MSA-eligible grassfed cattle to arrive on the market in the next couple of months, however, which could help the supply situation.

“Because of the lack of demand for heavy feeder cattle earlier, as custom-feeders from dry areas further west started to fill up feedlot pens, some professional backgrounders on the western Darling Downs who have had a pretty good season appear to have decided to hold on to those feeders, taking them through to grassfed MSA steer slaughter weights,” he said.

“At a kilo a day, it’s not hard to take those heavy feeders 450-470kg that would otherwise have gone into the feedlot through to 550kg to kill as an MSA flatback bullock.”

“There wasn’t a lot of demand for 100-day feeders late last year, and at current rates, selling them as grassfed MSA would look a pretty good option.”

“While the feedlots recently have had big intakes, a lot of those are western vendor-bred cattle looking for a home as things got dry. The professional backgrounders on the western downs or the Dawson Valley probably had feeders that they did not want to sell to feedlots at 175c or less, after seeing earlier money at 190c or better. Because they had feed, another three months and they had a nice little MSA bullock,” the processor contact said.

At MSA rates evident in the market this week, those good grass-finished 0-2 tooth steers with 8-10mm of fat could easily be worth worth $1000 and potentially more, he said.

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