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MLA market briefs 12 September 2014

Beef Central, 11/09/2014
  •  EYCI buoyant above 360¢ mark
  • July female cattle slaughter highest in ten years
  • More upward movement in US beef market
  • Aussie meat exports to the EU remain firm
  • Thursday daily cattle summary
  • NZ beef exports higher in August
  • August co-products summary
  • Recovery in 85CL demand from Japan
  • VIC, NSW, QLD weekly cattle summaries
  • Beef and veal export values high in July

EYCI buoyant above 360¢ mark

11 September 2014

For September-to-date, the Eastern Young Cattle Indicator has maintained its level above 360¢/kg, assisted by isolated showers across the country, especially in the drought affected areas of the north.

Aside from hitting 361¢ for just one day in April, the EYCI hasn’t exceeded the 360¢ barrier since falling below it in May 2012, pressured by large lines of drought affected cattle continuously entering the market. Since the beginning of September, however, the EYCI has traded between 360.25¢ and 362¢/kg.

Expressing the current strength of the market, and producers capitalising on the highest prices in over two years, average weekly offerings have also been significantly higher (64pc) than September last year at 19,700 head, yet price buoyancy has been maintained.

Within the lines that contribute to the EYCI, yearling heifers and steers have each lifted to similar magnitudes in recent weeks, indicating the strengthening restocking intentions across the country for young cattle.

September is traditionally a month when cattle prices seasonally decline, yet so far the apparent strength in the market is reversing the trend, and with good seasonal fortune, is likely to remain the case for the balance of the year – or at least minimise the significance of the usual decline.

 

July female cattle slaughter highest in ten years

11 September 2014

Teys boning room HQAdult cattle slaughter increased to 846,707 head in July, up 12pc year-on-year and 29pc above the five-year average. The year-on-year increase was made up entirely by cow and heifer slaughter – which was 46pc above the July five-year average, at 450,642 head.

Seasonally, female cattle slaughter in July usually begins to ease, with the percentage of cows and heifers making up the overall adult kill declining. In contrast, this year females accounted for 53pc (five-year average for July is 47pc), a rate which has not occurred over the past ten years in any month – and it has been sustained above 50pc since February.

Average year-to-July adult carcase weights were 275kg, down 3kg year-on-year and 5kg below the five-year average as a result of the prolonged dry conditions in northern Australia. However, as a result of the increase in slaughter, total beef production increased 10pc year-on-year, to 231,472t. This carried the year-to-July beef production to 1.45 million tonnes, up 9pc year-on-year and 18pc on the five-year average.

 

More upward movement in US beef market

11 September 2014

This week saw new highs for a number of beef and cattle markets in the US, with imported categories generally dearer again, increases in lean and cutout prices for domestically-produced beef, cattle futures moving up again and spot cattle prices also increasing.

The imported 90CL cow beef indicator reached another new high, up US9¢ to US292.5¢/lb CIF (A672¢/kg FAS), continuing to close the gap with domestic 90CL beef. In fact, in FOB terms, imported 90CL beef reached US300¢/lb in some trades, according to the weekly Steiner Consulting Group report on the imported beef market.

Some uncertainty has entered the US spot market over future supplies of lean beef (to November, in particular), with the seasonal US cow kill not yet increasing, and the impact of some increases in cattle prices in Australia still to be felt in the market. Furthermore, import entries of NZ beef in the last week were the lowest they have been in months, suggesting the low point of NZ beef availability may be very close, if not reached already.

 

Aussie beef exports to the EU remain firm

11 September 2014

The strong grainfed beef demand continues to assist beef exports to the EU, with overall shipments during August up 23pc year-on-year, at 2287t. EU beef imports under the HQB grainfed quota for the first quarter of 2014-15 are likely to be at the highest level since the quota started in 2009. Imports during July and August were 8834t, accounting for 73pc of the quarterly allocation (12,050t).

 

Thursday daily cattle summary

11 September 2014

yards-cattle-saleyardsNumbers at Dalby eased 14pc this week at 6260 head, and, while there was a full panel of export and feeder buyers present, prices were mixed, with cows, unable to match the previous weeks high prices, falling 4¢ to 10¢ and heavy grown steers and bullocks easing 4¢ to 6¢/kg. Light C2 yearling steers returning to the paddock eased 7¢, to average 202¢, while medium C2 yearling heifers to lotfeeders trended 9¢ dearer, to average 185¢/kg. To slaughter, C4 bullocks averaged 204¢, down 6¢ week-on-week, and heavy D4 cows averaged 185¢, down 7¢/kg.

Casino yarded 1786 head, up 5pc week-on-week, to a market which was easier, with most vealers down 10¢ to 15¢/kg. Going to restockers, 80kg+ D1 calves averaged 169¢, down 16¢, and medium C2 vealer steers averaged 197¢, selling from 184¢ to 206¢/kg. Medium C2 vealer heifers eased 12¢, to average 198¢, while medium D2 cows to slaughter were 2¢ dearer, to average 129¢/kg.

Consignments to Warrnambool lifted 12pc, at 820 head, with the quality of young cattle mixed but prices lifting across most categories. Heavy C3 yearling heifers averaged 189¢, making 185¢ to 190¢, while heavy C3 grown steers to slaughter averaged 192¢, up 1¢/kg week-on-week. Medium C3 manufacturing dairy steers made from 185¢ to 189¢, to average 185¢, while medium D1 dairy cows were 20¢ dearer, to average 146¢/kg.

 

NZ beef exports higher in August

11 September 2014

Total New Zealand beef exports in August were 28pc higher than year-ago levels, at 20,690 t. NZ’s Volumes to the US rose 44pc, at 9683t, and demand from China continued to strengthen, with shipments more than tripling year-on-year, at 2033t. Beef exports to the Middle East during August increased 37pc on last year, at 1300t, while on the other hand, volumes to South East Asia (1256t) and Japan (1218t) fell 22pc and 15pc, respectively.

 

August co-products summary

11 September 2014

August beef and veal offal exports were 13,465t, up 5pc year-on-year, taking the year-to-August total to 104,454t. For the month, the largest volume exports were tripe (24pc), liver (15pc), skirt (10pc) and heart (8pc). Liver was unchanged from last year, at $1.13/kg, thin and thick skirt was up 95¢ and 71¢, respectively, at $5.42/kg each, and heart increased 31¢, at $1.60/kg.

For August, bloodmeal 85 ring dried averaged $953/t ex-works, down 7pc year-on-year, and MBM 50 averaged $659/t ex-works, down 5pc. Beef tallow (1pc FFA) eased 34pc year-on-year, averaging $663/t ex-works, underpinned by quietening trade conditions.

The Queensland green hide price (281-350 kg) averaged $35.95/hide, up 6pc year-on-year, while the NSW green hide price averaged $40.73/hide, up 16pc year-on-year.

 

Recovery in 85CL demand from Japan

10 September 2014

mcdonalds-japan-2Relentless demand for Australian manufacturing beef from the US has drawn strong prices this year, especially at the leaner end of the categories. That said, there has been a gradual recovery in 85CL demand from Japan, while 65CL – the most demanded chemical lean product in Japan – remains subdued.

Commonly, 85CL manufacturing beef is used for various food-service, take away meals and processed food products in Japan, with Australia being the largest supplier in the market. After lower shipments from May to July, August volumes of 85CL to Japan exceeded the same month in 2013 and 2012, indicating resilience for stronger prices, underpinned by the country’s improving economy.

In contrast, exports of 65CL to Japan further weakened in August, largely influenced by the major customer, McDonalds, whose August sales had slumped by 25pc year-on-year, impacted by a food safety incident reported in July.

 

Vic weekly cattle summary

11 September 2014

Overall consignments ease

Cattle throughput across the state decreased 9pc this week to 12,868 head, with the majority of saleyards yarding fewer numbers. Consignments at Ballarat were back 27pc week-on-week, at 342 head, while Pakenham penned a total 1432 head, down 6pc on last week. There were similar numbers yarded at Camperdown (780 head), while Shepparton (3300 head) decreased 6pc. Cattle supply at Wodonga (3888 head) declined 21pc, attributed to the anticipation of rain forecast for the area, while Leongatha (1197 head) was 13pc lower. Numbers at Warrnambool (820 head) and Bairnsdale (870 head) were up 12pc and 65pc, respectively, while Colac (239 head) was back 19pc.

Quality mixed

Overall local restocker interest at Wodonga this week was relatively subdued, with the bulk of offering at the grown cattle sale consisting of well-finished high yielding beef cows. Shepparton saw fewer heavy bullocks penned, while demand was strong across heavy cow grades.

Quality at Pakenham was very mixed, reflecting prices across most categories, while good supplies of cattle suitable to feed met cheaper prices. There were limited numbers of prime cattle yarded this week at Leongatha, with a better selection of yearling heifers suitable to the trade. Bairnsdale recorded firm averages on all prime cattle categories, while yearlings were best represented by heifers at Warrnambool this week.

Prices vary

Across the state, heavy C3 yearling steers to slaughter eased 3¢ to 200¢, while the equivalent heifer portion was back 2¢ week-on-week, selling from 170¢-202¢/kg. Heavy C3 grown steers to processor buyers averaged 3¢ dearer than a week ago, making from 168¢-210¢, while medium D3 grown heifers to slaughter increased 9¢, to average 182¢/kg.

Medium D2 manufacturing dairy steers were up 4¢ on last week, averaging 181¢, while a large supply of cows across the state saw heavy D4 beef grades sell 11¢ higher, ranging from 158-194¢/kg.

 

NSW weekly cattle summary

11 September 2014

Numbers steady on last week

Cattle supply across the state varied through most selling centres with the large saleyards of Dubbo and Wagga yarding close to 6400 head. Despite numbers slipping 21pc at Dubbo, quality remained quite good. The Hunter markets all registered an increase in throughput driven predominately by the improvement in market conditions over the past few weeks.

Supplementary fed lines start to increase

Prices varied this week as producers looked to offload plain-conditioned lines, predominately through Tamworth and Gunnedah, while supplementary-fed cattle were in good numbers throughout Wagga, CTLX and Dubbo. The well-finished medium and heavyweight cattle continue to attract strong demand from feedlot and processor orders as the winter months have now come to a close.

Prices ease slightly due to a slip in quality

Despite the majority of prices easing slightly on last week, demand at the majority of centres remained relatively strong. Mediumweight vealer steers returning to the paddock sold at similar levels to last week ranging from 166¢-230¢, while the C2 heifer portion to processors averaged 189¢, back 5¢/kg on last week. Light yearling steers to restock generally sold from160¢-228¢, back 6¢/kg. Medium and heavy weight lines to feeder buyers sold from 170¢-218¢, up slightly week-on-week. Heavy C3 yearling heifers eased 2¢ on last week averaging 182¢/kg. The 500-600kg grown steers topped at 201¢, ranging from 182¢-210¢/kg. Mediumweight D3 cows sold steady on last week topping at 180¢ to average 159¢/kg. The heavy weight D3 lines averaged 167¢, unchanged.

 

QLD weekly cattle summary

11 September 2014

Cow supplies rise

The supply of stock at physical markets covered by NLRS varied from centre to centre and overall numbers continued to remain relatively high. The overall quality of the large supply of young cattle was mixed, and in the grown cattle section heavy grown steers and bullocks were scarce, while the large penning of cows was dominated by good heavy classes. A full panel of export and feeder buyers was present and all were operating, along with a few restocker buyers. Young cattle experienced a mixed trend, with light weight plain condition classes struggling to maintain the previous week’s averages. However, extra domestic feeder buyer competition helped boost medium and heavy weight yearling steers and heifers, and in places demand was pushed on by restockers. Heavy grown steers and bullocks could not maintain the previous weeks improved prices, and cows followed a similar trend from the very high prices the previous week.

Prices mixed

Calves returning to the paddock averaged over 20¢ cheaper at 175¢, with the very occasional sale to 216¢/kg. Vealer heifers to local and southern processors averaged 13¢ less at 178¢ with a few to butchers reaching 204¢/kg. A large selection of lightweight yearling steers returned to the paddock at an average of 204¢ with the occasional pen reaching 226¢/kg. Medium weights to feed averaged 5¢ dearer with most just over 200¢, with sales to 216¢/kg. Restockers were also very active on the medium weights and paid 218¢/kg. Heavyweights to feed also averaged 5¢ better with a large number in the early 200¢ range, with sales to 216¢/kg. Lightweight yearling heifers were well supplied and average prices eased by 3¢ to 11¢, with most around 168¢/kg. Mediumweights to feed experienced a lift in price to average 9¢ dearer at 184¢ with a few pens reaching 206¢/kg.

Heavy grown steers averaged 4¢ cheaper at 201¢ and bullocks lost 6¢ to average 203¢ with the occasional sale to 221¢/kg. Prices for cows eased by 4¢ to 7¢, with medium weight 2 scores averaging 135¢/kg. The large supply of good heavy cows mostly sold around 182¢, with some to 197¢/kg.

 

Beef and veal export values high in July

10 September 2014

2011-4-20-shipping-contailersFor July, beef and veal exports were valued at $689 million (121,525t), up 18pc month-on-month, taking the year-to-July total to $3.9 billion (706,225t), a 29pc increase on the same period last year.

The US remained the highest value market, at $210m (up 24pc on June), with demand driven by the historically low US cattle herd and high beef prices. Since November 2013, US monthly market share of Australian beef and veal export value has increased from a low of 15pc to 29pc (the five-year average is 19pc), and over the same period the average unit price has increased 13pc, to $5.49/kg – a 5¢ premium on the world average.

Japan was the second largest export market in value terms, at $145m for July, down 7pc month-on-month, and $836m for the year-to-July. With 21pc market share, Japan export unit prices averaged $5.40/kg. In a market where Japan has traditionally paid a premium to the US, for the third consecutive month Japanese unit prices were at a discount to US prices (9¢ for July), demonstrating the current strength in demand from the US.

Australia shipped $79m of beef and veal to Korea in July, up 8pc month-on-month, taking the year-to-July total to $505m. On average Korea spent $5.64/kg, a 15¢ premium to the US and 20¢ on the world average.

Accounting for 8pc of export value, shipments to China were worth $55m for July, up 28pc month-on-month, taking the year-to-July total to $405m. Average unit prices to China in July were $4.97/kg – 47¢ below the world average. With 5pc market share, $37m worth of beef and veal was shipped to the Middle East, almost half of which went to Saudi Arabia, taking the year-to-July total to $222m, up 14pc on the same period last year.

For July, beef exports to the EU were worth $33m, up 40pc month-on-month, taking the year-to-July total to $161m. The EU remained one of the highest valued markets, in unit price terms, paying on average $10.35/kg in July – $4.91 more than the world average and a 10pc increase year-on-year.

 

 

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