Record grid price claim stands up to scrutiny – but how does it measure up in real terms?

Jon Condon, 01/10/2014

SINCE Beef Central’s weekly kill article “Possible grid price records, as processors strive to maintain breakneck slaughter pace” was published yesterday, more information has come to light about historic cattle pricing and whether current SEQ grids might have reached an all-time record.

In the early 2000s, Australia Meat Holdings (later to become JBS) Queensland grids reached 400c/kg briefly for 0-4 tooth grassfed steer +300kg and 395c/kg for six-tooth at the company’s Dinmore plant in southeast Queensland.

Grid offers were 10c/kg less than that at Rocky, and 10c less again at Townsville. EU steer back then was about 20c/kg above Jap ox, but it had a top weight of around 320kg in those days. There was no two-tooth premium for steer +300kg in that era.

For heavy cow, there is no question that this week’s grid offer from two large processors in SEQ of 370c/kg is an all-time record. That’s being driven squarely by international grinding beef demand.

MLA’s NLRS direct consignment historical data from the era also supports the information above, but is a little ambiguous, as it represents an average grid price among a selection of SEQ processors, rather than the best price evident in the market at the time.

So Beef Central’s claim yesterday of a possible record SEQ grid offer stands up strongly to scrutiny.

For students of history, we’ve done some research into what the drivers were that pushed prices so high in 2004.

Here’s what happened:

  • BSE was discovered in the US in late 2003, leading to a five-year export bans in key importing countries like Japan and Korea, and placing enormous demand on imported meat supply out of Australia
  • a strong US economy pushed the A$ value down from above US80c to below 70c
  • the EYCI rose from around 300c/kg to close to 400c and
  • there was a period of erratic rainfall in northern Australia, disrupting slaughter cattle flows, and forcing processors to bid up, in the face of high international demand.

All four of those factors, or variations of them, are again sounding pretty familiar.

…but how does this week’s pricing measure up, in real terms?

Published below are two valuable graphs produced by agribusiness consultants, Bush Agribusiness, which overlay the Queensland Cattle Market Index from 1986 to today, adjusted for inflation, and compare nominal and adjusted QCMI figures. Larger versions of the graphs can be viewed using the gallery tool at the bottom of this page.

It tells a very different story to the outright price trend. The price ‘spike’ seen in 2004 is in clear evidence in the graph, as is another three years earlier, in 2001.

But what it clearly shows is that, in real terms with inflation removed, prices are nowhere near record highs, in fact they rate little above overage. In fact the most recent QCMI figure of 218.4 from Monday is at the median of inflation-adjusted prices from 1986 onwards, Bush Agribusiness principal Ian McLean points out.

While beef prices are an important part of the equation, as this earlier Beef Central article clearly indicates, it is Cost of Production that is the key driver of producer profits, and producers can do more to influence cost of production than they can in prices received.

Click on images below for a larger view, or use gallery images at base of page.


QCMI adjusted for inflation


Nominal & Real QLD prices







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  1. grant hood, 13/10/2014

    my missus’ father in dawson creek, bc last week saw 200lb calves weaned early on a dry finish go for $800. fuel’ food, rent, vehicles, intrest rates are all cheeper there.

    the winter doesn’t look so bad any more…

  2. Ian McCamley, 02/10/2014

    Thanks Richard. $7.39/kg live. I rest my case!

  3. Richard Hughes, 01/10/2014

    I am in Alberta Canada at the moment and sales last week saw 230kg weaners selling for $1700. A friend sold a deck of cull cows and bulls for $49,000, I hope we see this in Australia sometime soon.

  4. Ian McCamley, 01/10/2014

    What needs to be added to these graphs is the price received by all the other beef producing countries. Only then do we truly see how far our producer returns have fallen behind the rest of the world. On another point, comparing cattle prices against motor cars is not relevant because of their technological gains (I’ll drive a 2014 model over a 1970 model any day). Compare things that are timeless like wages, diesel, a coil of barb wire or boarding school fees!

  5. charles nason, 01/10/2014

    Ken Howard of QDPI used to do a Holden/Land Cruiser index ( ie how many bullocks it took to buy one ) My memory of the early 1970’s was that it took about 20 bullocks to buy one and in the mid 1970’s it fell to about 60 bullocks to buy one
    It is about 50 now??? So we have a long way to go!

    Let’s see if we can dig it out, Charles – Jon Condon

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