The market vacuum left by the 18-month limitation on live cattle exports into Indonesia is starting to impact more significantly on northern Queensland’s cattle markets, particularly as the region’s summer monsoonal wet season is yet to arrive.

Worst hit has been the store market for Indicus heifers, which are currently very hard to shift, stock agent sources say.

The accumulation of northern cattle which have not find a home in the live export trade since the Indonesian market closed in June 2011 is starting to weigh more heavily on the North Queensland region’s store and slaughter markets, as they arrive in increasing numbers.

Townsville stock agent Tim McHugh, principal of Hogan & McHugh, said the flow of cattle and subsequent market pressure had been delayed by the good wet season in the Channel Country and Barkly regions 12 months ago, when a lot of the ‘surplus’ lighter northern livex cattle from the NT were soaked-up in those regions by pastoral companies and larger private operators with plenty of grass.

“But the wet season just hasn’t happened as yet this year, and the demand for herd rebuilding is not there any more. If anything, the lack of a wet has exacerbated the trend for those northern boat cattle to be offloaded back into Queensland in recent months,” he said.

Beef Central’s weekly kill reports showed processors in northern and central Queensland areas were throwing a lot of money around in the later stages of 2011 to attract killable cattle, but that was not the case towards the end of last year, as conditions started to dry off.

“The flow of live export cattle kept a lid on those slaughter rates late in 2012, and we just didn’t see that buying aggression that we typically see at that time of year,” Mr McHugh said. 

He said Brahman heifers near Townsville were making around 150c/kg for the live export trade late last year – still not a lot of money – but quotes received recently from southern Queensland lotfeeders had deteriorated further to just 125c/kg for Indicus heifers 300-350kg ex Winton.

“Northern heifers are very hard to sell on the current market,” he said.

“Back in 2010 and early 2011, heifers were in demand, because live export was going so strong, and ACC was in the market for Brahman heifers to feed for Coles. The other factor was the strong demand for PTIC heifers out of Central and southern parts of Queensland, after the solid back-to-back seasons and demand for herd rebuilding.”

“But after the collapse of the live export market, then ACC removed higher indicus from their buying spec (due to its shift to no HGP), and more recently herd rebuilding demand has slowed with the shift in the weather patterns, Brahman heifers have become very hard to place,” Mr McHugh said.

The northern Queensland store market started to soften as conditions had started to decline, since October.

“We were selling Charbray weaner steers for backgrounding for around 220c/kg back then, but they fell to around 200c before Christmas, and those cattle would probably only bring 180-190c/kg today,” Mr McHugh said.

He said the strength of the live export trade had provided a critical market lifeline for northern cattle producers during the very dry years of the 1990s.

“If we had not had live export to provide market support for those cattle in those tough years, the stench in the bush would have been mind-blowing,” he said.

The concern was that if this year remained very dry, the absence of competition from live export could put the northern store cattle market under considerable pressure.

A couple of NT producers had even taken the surprising step of trucking large lines of feeder steers back into southern Queensland to place onto grain, but this came at considerable transport cost.

• More on early season grid price trends in tomorrow’s first weekly national kill summary for the year.