Markets: PCAS-certified weaners making distinct premiums

Beef Central, 11/12/2013

PROCESSOR price premiums are helping build supply chains for traceable pasturefed accredited beef cattle as branded product is boxed to sell domestically and overseas.

Just seven months after the Cattle Council of Australia launched its Pasturefed Cattle Assurance System, backgrounders and finishers seeking quality assured pasturefed cattle led buying at the recent Amherst, Wittalocka and Moville blue-ribbon circuit weaner sale in South Australia.

At the November 29 sale, agents Spence Dix and Co sold 2396 autumn-drop Angus and Angus cross weaners, with all but about 50 being PCAS-certified or eligible. The 1868 steers averaged $609 and sold to $740 and the 528 heifers averaged $521 and made up to $665.

Agents said the sale was stronger than expected, with some PCAS-certified lines selling up to 10c/kg above current weaner rates to stay in the PCAS system.

"There were certainly some volume backgrounders there that would carry them through the PCAS system," auctioneer Jonathan Spence told Beef Central.

Mr Spence said buying interest was supported by the 20c/kg premium being offered for PCAS-certified slaughter cattle beef by Teys Australia. Wholesaler and exporter Atron Enterprises is also offering the premium to suppliers, through its kill at Northern Cooperative Meat Co at Casino, NSW.

"PCAS certification on the cattle certainly didn't do us any harm,” he said.

"The main reason we highlighted the PCAS certification on the cattle was that buyers from the previous sale were seeking PCAS eligibility declarations on their purchases," Mr Spence said.

"They were saying if you can make the whole sale PCAS, we will support you pretty strongly."

Spence Dix and Co director Rodney Dix said most of the cattle from the sale that sold to local South Australian buyers would stay in the PCAS system.

The top-priced line of 20 Angus steers from Ian and Louise Johnson, Wittalocka, sold for $740 (392.3kg-189c/kg) to a Gippsland client of Chris Stanley Livestock, Woori Yallock, seeking pasturefed farmgate quality-assured cattle for a non-PCAS supply arrangement through JBS Australia that offered premiums of up to 20c/kg above MSA rates.

"I told Ian Johnson the reason we are back is that the cattle are available early in the season and they perform – they stack weight on," Chris said.

But Ian Johnson said PCAS eligibility or certification was a strong requirement for some repeat buyers selling stock into Teys Australia's Naracoorte meatworks.

"For some of our clients I think it (PCAS certification) kept us in the ballgame," he said.

"I would say it (PCAS certification) had a reasonable effect, but not everyone sells their bullocks to Teys."

Chay and Merrett client Hillton Rural at Bray paid $735 (376kg-195c/kg) for 50 of Russell and Marnie Kamp's Coolana and Stoney Point-sired PCAS and EU Angus steers, and bought another 50 RMK Pastoral steers for $650-$680.

Hillton Rural owner Bradley Nunan said he was certified under PCAS in August and bought accredited cattle to give himself another marketing option, though he had recently sold cattle outside the system for more than Teys' PCAS price.

RMK Pastoral principal Russell Kamp said though the sale prices reflected the state of the market, the heavier RMK Pastoral cattle achieved a $60 a head price premium over other PCAS cattle.

"My gut feeling is that there was no discount and no premium (for PCAS certification).

"I think the market generally didn't respond to the PCAS at all," he said.

"We averaged about $660 a head (for 222 head) or a bit over $2 a kg and generally I wouldn't be over-satisfied with that."

Chay and Merrett agent Owen Merrett said prices at the sale were similar to other sales, but about 100 of the 500 weaners the agency bought at the sale would stay in the PCAS system.

Teys Australia livestock general manager Geoff Teys believed the blue ribbon sale was the first time significant lines of PCAS-certified cattle were offered for sale.

Teys' Naracoorte works was receiving sufficient quantities of PCAS product to brand boxes and market it to domestic and overseas buyers, he said. The company’s 20c/kg price premium is for the PCAS-MSA cattle grading 1-8 boning group, from 180kg to 340kg carcase weight.

"We have started to pack PCAS-branded product because we are now getting a sufficient critical mass to do it, out of Naracoorte,” he said.

"But the supply can't meet the demand at this stage and there is more scope for more people to come on board."

CCA spokeswoman Lisa Cotter said 295 Producer Identification Codes (PICs) had now achieved PCAS accreditation, with certified producers in Queensland , NSW, Victoria, the Northern Territory and South Australia. The greatest concentration of producers were in Limestone Coast region of South Australia, the Riverina and south west slopes in NSW and central Queensland.

"The premiums offered by the processor are certainly driving producers to be involved in PCAS," she said.




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