Meat & Livestock Australia publishes a range of market intelligence updates each week relating to developments in domestic and export demand, red meat marketing initiatives and research and development programs. Below is a summary of recent MLA-generated articles and headlines with relevance to the beef and cattle sector.All items are authored by MLA staff, with no input from Beef Central.
- Indian beef exports revised lower – USDA
- Thursday daily livestock article
- Review of BSE testing protocols in Japan
- Short trading week delivers mixed price signals
- Chinese government set to tighten food safety regulations
- US cattle on feed number expand, but still lower year-on-year
- Slow Aussie exports to Russia in 2013 due to emergence of more attractive markets
- Animal welfare priorities
Indian beef exports revised lower – USDA
The US Department of Agriculture forecasts for Indian beef (including buffalo) export for 2013 have been revised significantly lower from the October 2012 estimate, to 1.7 million tonnes – back 21pc from the initial 2.2mt (April 2013 Livestock and Poultry: World Markets and Trade – USDA).
Underpinning the significant downward revision has been a 9pc decrease in production from the October estimate, back from 4.2mt, to 3.8mt. While production has been revised lower, the USDA forecast is still well above previous levels, with the 2013 estimate up 10pc on 2012, and 30pc on the five-year average.
Additionally, while the USDA have sharply decreased India’s beef export estimate for 2013, India is still expected to become the world’s largest beef (including buffalo) exporter, closely followed by Brazil (1.6mt) and Australia (1.5mt).
Thursday daily livestock article
Consignments at Dalby this week increased 16pc, with the usual feeder operators present as well as a large number of restocker buyers and onlookers. A large yarding of yearling steers saw medium weight C2 grades returning to the paddock lift 4c, to average 164c, while light D2 yearling heifers to processors rose 1c, to make 126c/kg. Medium C3 grown steers to feed were 8c higher, averaging 152c, while medium D3 cows sold to slaughter lifted 1c, ranging from 98c to 105c/kg.
Numbers at Casino more than doubled from last week, with young cattle making up a large percentage of the yarding. Medium C2 vealer steers sold to processors declined 8c, selling between 138c and 162c, while medium C2 vealer heifers to slaughter were 11c lower, ranging from 135c to 161c/kg. Light D2 cows to processors decreased 8c, selling from 43c to 91c/kg.
Throughput at Warrnambool was 20pc higher week-on-week, with some good supplementary fed yearlings and bullocks attracting increased demand, yet quality continues to contribute towards price variations. Heavy D2 vealer steers to slaughter ranged from 103c to 116c, while heavy C2 yearling steers to processors dropped 12c, to average 159c/kg. The C4 bullocks to slaughter made 178c, while medium D1 dairy cows were 14c lower, making 77c/kg.
At the conclusion of Wednesday’s markets the Eastern Young Cattle Indicator (EYCI) was 1c lower, settling on 303.25c/kg cwt. Trade steers lifted 1c on 174c, while medium steers dropped 1c, to make 160c/kg. Feeder steers were 1c lower on 162c, while heavy steers declined 2c, making 172c/kg. The medium cow indicator rose 2c, to average 104c/kg.
Review of BSE testing protocols in Japan
Japan’s Ministry of Health, Labour and Welfare requested all municipal Governments to review their current BSE testing protocols, following its decision to change the inspection age of domestic cattle to older than 48 months.
The request was made on the back of the local authorities continuing to test all cattle for BSE, despite previous announcements by the Ministry. Japan’s requirement for BSE testing had been changed from all cattle to under 21 months in 2008, then to under 31 months in April this year, and is scheduled to be modified again to older than 48 months from 1 July.
The Prion Expert Investigation Committee of Japan also endorsed the use of meat and bone meals derived from domestic cattle as fertiliser, with conditions that it must not contain Specified Risk Materials and shouldn’t be used as animal feed.
Short trading week delivers mixed price signals
While a short trading week can sometimes tighten supplies and bolster prices, this week’s ANZAC Day break did very little to limit the downward trend in cattle prices. Huge yardings again at some Queensland markets, historically high slaughter levels and the sustained run of disappointingly dry weeks continues to suppress producer confidence and returns.
This week saw the EYCI drop to 303.75¢/kg, and given the current conditions, is likely to soon drop below 300¢ for the first time since late 2009. The weight of the season, A$ and sluggish demand for chilled beef continues to keep the pressure on the heavier categories, with heavy steers this week at 307¢, while cows fell a further 4¢, to average 239¢/kg.
Australian beef exports to China look like they will again expand into uncharted territory in April, while total exports will be the highest for some years. However, while export volumes remain strong, returns continue to be erased by the high A$ – weakening the financial viability of the entire industry.
Chinese government set to tighten food safety regulations
A notice recently released by the State Council of the People’s Republic of China suggests that improving national food safety standards will be a major task for government authorities this year (China Daily).
As part of its efforts, the government will reportedly conduct inspections and overhaul major food safety hazards through the supply chain – from planting, breeding and slaughtering to product distribution through to end-users, including the catering sector. The key tasks indicated in the notice also include the improvement of food-related standards, laws and regulations.
It has also been reported that strong demand for imported beef from China in recent months has partly been triggered by concerns over the food safety among Chinese consumers. It is said that consumers tend to prefer imported meat (if they can afford it) due to their lingering food safety concerns.
Australian beef exports to China for the first quarter of 2013 reached 28,624t, accounting for 13pc of total Australian exports during the quarter. Coinciding with the huge shipments, export values to China during the first two months of 2013 also jumped 702pc year-on-year, to A$65 million.
US cattle on feed number expand, but still lower year-on-year
There were 10.9 million cattle on feed in US feedlots with over 1000 head capacity as at April 1, according to the US Department of Agriculture’s Cattle on Feed Report. While this figure was 5pc lower than a year ago, it was an increase on the 1 March figure – the first time the number of cattle on feed has increased through March in over five years.
The 1 April figure represents the eighth consecutive month with lower numbers on feed than the previous year, despite a 6pc increase in cattle placed on feed and a 7.7pc drop in fed cattle marketed.
With grain prices having fallen in recent weeks, following higher than expected stock volumes, and pastures still relatively slow in the US at the moment, there is potential for cattle on feed number to remain steadier through the northern spring and summer than in previous years.
This likelihood would be enhanced by reports of more light cattle being placed on feed in recent months, which will take longer to reach finished weights. The upshot of this for Australian producers should be lower US production in coming months, possibly creating more marketing opportunities for Australian beef.
Slow Aussie exports to Russia in 2013 due to emergence of more attractive markets
The emergence of Russia as a sizeable and consistent beef export market for Australia since 2008 has provided a valuable alternate to Australia’s traditional large export markets, Japan, the US and Korea. Beef exports to Russia averaged 44,460t over the past five years, cementing Russia as Australia’s fourth largest export destination.
However, while the initial slowdown in shipments in 2012, to 31,054t, and further decline in early 2013 (first quarter exports were back 52pc year-on-year) has been unwelcome news for the Australian industry, its impact has been negligible, as other markets stepped up to the mark to demand additional Australian beef – namely China and the Middle East.
Australian beef exports to Russia slowed in 2012, as a large devaluation in the Brazilian currency increased their competitiveness in the market at the expense of Australian beef. An increase in Paraguayan shipments to Russia, stemming from market access restrictions to their largest market, Chile, also increased competition for Australian beef. Illustrating the competitiveness issues faced by Australia in 2012 is a comparison of relative cattle prices across the three countries.
In 2012, Brazilian trade steer prices (Sao Paulo), when adjusted to $US, averaged 329US¢/kg cwt, while Paraguayan trade steer prices averaged 282US¢/kg. On the other hand, the Australian indicative national steer price averaged 357US¢/kg – well above both the Brazilian and Paraguayan indicative price. This price differential, combined with the currency and preferential tariff access that both Brazil and Paraguay enjoys (11.25pc compared to Australia’s 15pc) gives an insight into the price competitiveness challenges faced by Australian beef exports to Russia in 2012.
Interestingly, when observing relative cattle prices in early 2013, there has been a significant convergence across the three countries. In March, the Australian indicator averaged 336US¢/kg, while the Brazilian indicator stood at 332US¢/kg and the Paraguayan at 323US¢/kg. This reflects both a decrease in Australian cattle prices and an increase in Brazil and Paraguay (exchange rates have remained relatively unchanged). Assuming that cattle prices make up a significant proportion of beef production costs, and ignoring the difference in processing and shipping costs across the three countries, which should have remained relatively stable over this time period, theoretically, Australia’s ability to compete in Russia on price should have improved.
So, why have Australia’s beef exports remained flat to Russia throughout early 2013 when our price competitiveness should have increased? Record Australian beef exports to China and Saudi Arabia in early 2013, both markets in which Brazil is banned, provide some insight. As Australia has limited competition from Brazil in these markets, prices received can be higher than in markets where Brazil is a large competitor. Brazil, on the other hand, lacking access to these burgeoning markets, must sell their beef at lower prices into markets which they have access and compete with Australian product, Russia being a perfect example.
Beef will flow to where the price is highest, so the premiums being paid in alternate markets, particularly those in which Brazil has no access, are drawing product away from Russia at higher prices – helping to erase the blow from lower than expected Australian exports to Russia in 2013.
Animal welfare priorities
26 April 2013
With consultation closing soon on the draft Australian Animal Welfare Standards and Guidelines, MLA continues to invest in research which will help producers manage any future changes.
Once finalised and endorsed by governments, the Standards will be adopted into legislation, nationally. The legislation could govern how livestock producers perform routine procedures such as castration and tail docking.
In the last decade MLA has invested nearly $4 million in animal welfare projects. This investment is driven by the industry’s desire to improve the wellbeing of livestock, the resulting production outcomes this brings and, more recently, the growing interest from the Australian community in the way animals are cared for.
The development of the new standards and guidelines are “a compelling case for action”, according to Jim Rothwell, manager of MLA’s Sustainability Research and Development program.
Two three-year projects aim to develop cost-effective methods of pain relief and lay the scientific basis for future research into pain management in livestock.
Learning from the sheep industry
Technology devised as a mulesing replacement may help cattle producers reduce stress associated with castrating older animals.
MLA is funding SVW Technologies director Peter St Vincent Welch to modify the technology, which he has been developing for seven years.
Peter discovered that sodium lauryl sulphate (SLS), injected into a sheep’s breech skin, denatured skin protein to remove wrinkles and increase the bare breech area.
He modified the US-developed Pulse NeedleFree system to carry a multi-tube head that injected SLS over a wider area.
For the castration project, Peter is again modifying the NeedleFree system so that it can inject anaesthetic, analgesics or SLS before castration of older cattle.
The castration research is still in its infancy, but Peter believes the process will be practical for use by producers wanting to grow out bull calves and castrate them late, after profiting from the growth benefits of testosterone.
Early results have been consistently positive; more trials will be done with CSIRO.
Medication on demand
Can sheep or cattle learn to consume treated feed or water that eases the pain of procedures like castration or tail docking?
A similar concept has worked in studies of poultry. PhD student Danila Marini aims to find out whether it works for sheep and cattle on-farm.
Her supervisor, CSIRO animal behaviour researcher Dr Caroline Lee, said the project has to first answer a scientific question: Can ruminants learn through association to self-medicate?
"Along the way, we might learn about how animals perceive the pain related to husbandry procedures," Caroline said.
“At the moment, we gauge pain by taking external measurements such as the stress related hormone, cortisol. That’s a very different approach to an animal telling us directly through its behaviour how much pain it is experiencing,” she said.
- Find out more and comment on the draft Australian Animal Welfare Standards and Guideline before the closing date of 6 May