Markets

Live exporters begin sourcing heavy cattle out of southern feedlots

Jon Condon, January 18, 2016

LIVE exporters servicing Southeast Asian markets are for the first time sourcing heavy slaughter-weight cattle from southern Queensland and northern NSW feedlots – in direct competition with grainfed beef processors.

While there has been competition for lighter feeder weight cattle previously, sales reported last week were the first where traditional heavy grainfed slaughter cattle have been sold into the live export trade.

johnson-bros-3-copyBeef Central understands at least three southern Queensland/northern NSW feedlots have sold cattle to live exporters in January, for shipment to Vietnam out of the Port of Townsville.

Prices reported last week were between 300c/kg and 310c/kg liveweight, at the feedlot. One unconfirmed report indicated a highest price of 320c/kg liveweight, but that was for cattle delivered Clermont in Central Queensland.

While there are no direct comparisons with cattle available in the Northern Territory, heavy export steers have been making around 350c/kg liveweight in Darwin recently.

In comparison, the spot market for 100-day 0-2 tooth grainfed cattle with Southeast Queensland export processors last week was 550c/kg dressed weight. At a typical dressing percentage of 56pc, that translates into a liveweight price of 308c/kg.

But there are some big differences between the processing and live export channels. The live exporter involved, Elders’ North Australian Cattle Co, still had a 1200km freight cost to deliver the feedlot cattle portside, in Townsville. For one consignment from a feedlot near Walgett, NSW, the freight distance was more like 1500km.

Additionally, the feedlots involved in the deals had no exposure to meatworks grids, which often discount stock off the grid quote. Nor was there a freight component borne by the vendor to get the cattle to the abattoir.

One prominent feedlot contacted by Beef Central said it had sold several consignments to agents representing live exporters operating out of Townsville. One consignment made 300c/kg.

“We’ve never sold fat cattle to live exporters before,” the feedlot manager said.

The first mob sold to live exporters was towards the heavier end of an export specification 450-700kg.* Some of those steers were older cattle, perhaps four and six teeth, typically 10-15c/kg below the premium grid price for younger cattle.  At least one of the recent sale lines had been booked with a processor for an upcoming kill slot, although this was unpriced.

As reported last week in a separate story on Beef Central, commercial feedlots are playing a different role in live export cattle procurement in central and northern Queensland, where numbers are hard to find at present. A number of feedlots are being used to grow light store cattle around 200kg liveweight out to Indonesian weight requirements above 260kg.

 

* Editor’s note: This comment has been modified since the original version of this article appeared. Attention has been drawn to the fact that the article originally suggested that grainfed cattle from the feedlot up to 620kg in liveweight were included in the live export consignment. Beef Central now accepts that the feedlot operator was referring to 100-day cattle in general in the feedlot at that weight – not necessarily those sold to the live export buyer. Apologies for any confusion. 

 

 

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Comments

  1. Helen Armstrong, January 19, 2016

    Slaughter in Indo is about $30.00 per head, in Aus it is about $360.00. USA is far cheaper than Aus. Feeding is also cheaper in Indo who have refined the art considerably, and Vietnam is adopting those lessons quickly. Even cattle that go for slaughter are still fed for a time before slaughter.

  2. dean collins, January 19, 2016

    Still find it hard to believe the costs of shipping live is cheaper than slaughter costs here in Australia.

    Or am I missing it and it’s a freshness issue and not just a cost of slaughter issue.

  3. Patrick Francis, January 18, 2016

    It would be interesting if Beef Central followed the value chain of these finished cattle being processed in Vietnam . Given the costs of producing finished cattle on grain in Australia, shipping to Vietnam, then processing and wholesaling in Vietnam who are the customers buying this beef, especially the sweet cuts? How do costs of processing, boning out in Vietnam compare to the cost of the same procedures in Australian works?

    Good idea, Pat. Dr Ross Ainsworth, our southeast Asian market correspondent, has agreed to put together a comprehensive summary on this topic in one of his upcoming columns. Editor

    i

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