MLA Reports

MLA market & news briefs – 12 June 2014

Beef Central, 12/06/2014

Producer input costs edge higher in March quarter

June 11, 2014

During the March quarter, the Northern and Southern Beef Producer Input Price Indices (BPIPI) each edged 3% higher year-on-year, while on a quarterly comparison, the northern index rose 1% and the southern was steady.

For northern Australia, a 2% year-on-year decline in the capital cost of the beef cattle herd, combined with a 6% decline in interest paid, were not enough to offset rises across most other categories. Freight costs increased 4% year-on-year, underpinned by the drought-induced high cattle turnoff during the first quarter, while depreciation and repairs and maintenance were each up 2%. Other notable increases for northern beef producers were a 6% year-on-year rise in fuel, oil and lubricants and a 3% increase in wages for hired labour.

In southern Australia, on the other hand, the only index that decreased from the corresponding period last year during the March quarter was interest paid, also declining 6%. Interestingly, the capital cost of the beef cattle herd increased 4%, while depreciation and repairs and maintenance each rose 2% year-on-year. Underpinned by the drought depleted supply and subsequent very high demand, fodder increased 5%, while wages for hired labour lifted 3% and fuel, oil and lubricants rose 6%.

While indicative costs edged higher during the quarter, most cattle indicators edged lower, particularly medium cows, which averaged 6% lower for the quarter, at 244¢/kg cwt and trade steers were 2% lower, at 326¢/kg cwt – pressured by the unprecedented surge in supply from the ongoing drought across many regions.

 

 

Beef stocks high in Japan

June 12, 2014

A combination of steady supplies and soft demand continued to sustain Japan’s beef inventories at high levels during April, according to supply and demand data by Japan’s Agriculture and Livestock Industries Corporation (ALIC).

Imported beef stocks in April totalled 94,234 tonnes (boneless equivalent), 28% higher than the same time last year, while consumption remained very similar to the last year at 46,703 tonnes (down 1%). Beef sales at foodservice and retail during the month were reportedly firm, despite the rise in consumption tax, but weren’t strong enough to drastically reduce the accumulating inventories since the US beef age relaxation in February 2013.

The Japanese domestic beef inventory totalled 12,405 tonnes, up 23% from last year, on the back of declined consumption during the month (down 5% to 29,888 tonnes).

ALIC forecasts that beef imports during May and June have decreased by 21.7% and 10%, respectively, compared with high volumes in 2013. It also anticipates that the Japanese beef production has decreased by 6.7% in May, and 3.9% in June, largely due to reduced Wagyu slaughter.

 

Cattle market alert: Consignments ease with long weekend

11 June 2014

Total national cattle supply so far this week declined 14% compared with the same period last week, to 23,991 head, with all states yarding fewer numbers due to the long weekend, except for WA, which increased its yardings 67%, to 1,660 head. Consignments across Queensland were back 1%, at 7,539 head, while numbers in NSW reduced 20%, totalling 8,805 head. Throughput across Victoria was 23% lower week-on-week, at 5,290 head, while SA yardings decreased 45%, to 642 head. Cattle supply throughout Tasmania’s northern saleyards was back 58%, at 55 head.

Plainer quality

Across the Queensland markets, Roma store saw strong demand from feedlot buyers on light and medium weight yearling heifers, assisting prices, while there were mixed quality consignments drawn from western parts of the state. Export cattle were well-represented at Warwick, while a large proportion of the yarding consisted of plain quality cattle.

Further south, CTLX penned a fair to good quality yarding across all categories with plainer cattle offered, while there were reports at Gunnedah of young cattle which were suited to feeder and restocker orders. In the west, pastoral cattle dominated at Muchea as numbers lifting accordingly, with most drafts of plain quality.

Mixed price trends

At the close of Tuesday’s markets, the Eastern Young Cattle Indicator (EYCI) eased 5¢ week-on-week, to average 330.75¢/kg cwt. Trade steers were 4¢ lower on 195¢, while medium steers increased 1¢, to average 172¢/kg. Feeder steers were up 6¢ on 189¢, while heavy steers averaged 5¢ dearer on 191¢/kg. The medium cow indicator reduced 1¢, to settle on 116¢/kg.

Aussie beef exports to Brazil surge

June 11, 2014

Stronger Brazilian demand for Australian beef has been the catalyst for the rise in shipments to South America, with Australian beef exports for the January-May period up 4% year-on-year, totalling 3,567 tonnes swt. Exports to Brazil rose 61% for the period but, in contrast, declined 14.5% to Chile.

According to Secex (Foreign Trade Secretariat), Brazilian beef imports during the first five months of 2014 rose 5% year-on-year, to 18,998 tonnes swt – mainly driven by the World Cup, which starts this Friday. Australian beef shipments to Brazil totalled 1,346 tonnes swt, up 61% year-on-year, composed mainly of primal cuts, with frozen rump (mostly rump cap) representing 96% of total shipments. Imports from Paraguay and Argentina also registered an increase, up 18% and 4% respectively.

In contrast, beef exports to Chile declined 14.5% for the same period, to 2,221 tonnes swt. Interestingly, despite the lower total shipments, frozen exports increased substantially, up 129% year-on-year, to 838 tonnes swt with thick flank/knuckle accounting for 87% of total shipments.

 

Higher Chilean production drives imports down

June 11, 2014

Chilean beef imports eased slightly during the first four months of 2014, down 2%, to 46,255 tonnes swt. The decline was driven by a higher cattle slaughter during the first quarter, a consequent increase in domestic supply and a substantial decline in beef exports.

Cattle slaughter during the first quarter totalled 209,651 head, an increase of 10.5% year-on-year. The rise is partially explained by the lack of rain during the spring and summer seasons, which compromised the pasture and forced producers to send cattle to slaughter. In consequence, beef production rose 7.5%, to 54,030 tonnes cwt for the same period.

Chilean beef imports for the January-April period declined 2% year-on-year, with shipments down 25% from Brazil and 19% from Argentina, the major suppliers. In contrast, Paraguayan imports rose six-fold, totalling 12,813 tonnes swt, a result of the Paraguay regaining full access to the Chilean market in July last year. Chilean beef exports declined 40% for the same period, to 356 tonnes swt, having Korea as the major destination, at 129 tonnes swt.

Research update on managing tropical perennial pastures

June 6, 2014

Preliminary results from the WA component of a national MLA-funded pasture project have both supported and challenged previous findings on the management of tropical perennial grasses.

The project is looking at ways to incorporate legumes and other species into increasingly popular and nitrogen-responsive tropical grass pastures, such as kikuyu and panic grass.

The goals of the research are to provide:

  • a cost-effective source of nitrogen to increase the quality and productivity of the grass
  • a reliable winter feed when the grass is dormant, and
  • a rich source of protein for livestock

Research is taking place in northern and central-western NSW, Albany and Esperance on Western Australia’s south coast, and in Western Australia’s northern agricultural region.

Senior Research Officer Paul Sanford, from Western Australia’s Department of Agriculture and Food, is leading the Albany research.

“Kikuyu has been used for over 20 years in this area,” Paul said.

“It’s well suited to our sand because it spreads and protects the soil surface from erosion. It’s very grazing tolerant and it’s active in summer and autumn when annual pastures aren’t, so it’s great at filling the feed gap.”

However, kikuyu also has a tendency to ‘drought out’ its traditional legume companion, subterranean clover.

“In the last decade we’ve had failure in the legume component of our pastures around here, particularly if you get a false break in April,” Paul said.

“Autumn is still warm enough for kikuyu to grow, so it out-competes the germinating sub-clover for moisture.”

The Albany research has trialled a number of strategies aimed at suppressing the kikuyu to give companion species a chance to establish.

One strategy saw glyphosate applied at a rate of one litre/ha in summer/autumn, before the break of season, while another used a grass selective herbicide following the break of season.

“Based on our preliminary results, higher rates of glyphosate are required to suppress kikuyu outside the growing season, as there was no observable difference between spraying and not spraying,” Paul said.

“This year we’ll increase the rate to two litres/ha.

“We also found that Select® grass selective herbicide appears to be an effective means to suppress kikuyu without reducing sub-clover content following the break of season.”

Researchers also investigated summer sowing hardseeded legume species, to overcome the effects of a false seasonal break.

“The hard-seeded legume seeds and pods can be sown in January or February and then soften slowly, so – unlike sub-clover – they won’t be ready to germinate if you get early rain,” Paul said.

“This means they won’t have to compete with kikuyu when it is most active.

“Our experiments involved summer sowing five serradella cultivars (yellow serradella is pictured above) in late February, with and without kikuyu suppression, and with two different sowing methods: broadcasting and drilling.”

Paul said an early break of season in March and above-average rainfall produced the region’s best sub-clover germination in almost 10 years, “muddying the waters” for some of the research results.

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