Export order to test northern cattle pricing levels

James Nason, 29/08/2016

A new export cattle order released for Townsville this week poses an interesting test for northern pricing levels.

Meatworks grid prices have been easing by 10-20c in recent weeks as processors reduce shifts, having seemingly changed tack from trying to flush out cattle with higher prices and reverting instead to reducing shifts to better align with available numbers, as reported in Beef Central’s most recent weekly kill report.

A new live export released for heavy feeder and slaughter cattle (420kg plus) for delivery from Townsville next month has also followed the market down, with prices quoted at $2.95/kg for steers.

Whether the pricing will be adequate to draw out the required numbers to fill the ship will be the test.

Various factors are contributing to the tight availability of numbers.

Herds across the north are now much smaller than they were five years ago due to long-running and severe drought conditions.

After a better year rainfall wise many producers now have at least some grass and are focusing where possible on retaining numbers to breed cattle back up, no longer facing the same seasonal pressure to offload cattle.

But producers also need cash flow which will keep some cattle flowing forward.

These prices are also still attractive.

While back a little on recent weeks or months, they still represent historically high prices for the region.

“Everyone is working to get the cattle to fill the order, it is not an easy task at the moment,” Queensland Rural’s Troy Trevor told Beef Central.

“We have had a pretty good and pretty consistent season where cattle have been putting weight on right through the year

“There are some cattle available but it is just a matter of whether people want to sell them.

“This year it is a lot of different for most people, everything is a lot more relaxed for graziers because they have a little surplus feed and it has been a mild winter.

“There is no seasonal pressure on them as such, and they are lighter stocked after going through that drought, so they are just selling what they need for cash flow and to keep the wheels turning at home.”

Further north the quoted price for feeder steers in Darwin continues to rise, with prevailing rates now around $3.65, according to trade and production sources.

The trade is now watching and waiting for news from Indonesia as to what will happen with third trimester permits.

The new period begins next week on September 1, but it can often take weeks after the new period starts for permit volumes to be announced and allocated.

With new ministers and director generals now in place in the trade and agricultural ministries, there has been talk of further changes to Indonesia’s permit allocation arrangements as the country attempts to improve beef supply and bring down prices.

However, any definitive developments will not be known until the next round of permits or import arrangements are formally announced, which could be any time in the next month or so.


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