News

MLA market & news briefs, 19 June 2014

Beef Central, 19/06/2014

Hong Kong fully opens to US beef

19 June 2014

Hong Kong opened its borders to US beef and beef products derived from cattle of any age, as of June 17. The expansion gives the US the full access that the supplier had had prior to December 2003, when Hong Kong banned imports of US beef due to a discovery of BSE.

In December 2005, Hong Kong partially reopened the market to allow imports of boneless beef from cattle aged less than 30 months of age, before expanding access to include bone-in beef cuts from cattle within the same age range in February 2013.

Exports of US beef to Hong Kong increased significantly as market access widened from 2005, with shipments during 2013 jumping 90pc year-on-year to 120,900t. US beef exports to Hong Kong during January to April 2014 grew another 65pc year-on-year, to 41,900t. While strong demand from Greater China for beef continues in the medium term, such growth in US beef exports to the market last year is unlikely to continue into 2014, as the US cattle industry experiences reduced supply and higher prices.

Cattle market alert: Yardings increase with return to full trading week

18 June 2014

Yardings at markets reported by MLA’s National Livestock Reporting Service increased across all states after the return to a full trading week, with overall national supply lifting 36%, to 32,693 head. Supply in Queensland lifted 18%, to 8,925 head, while in NSW yardings were 62% higher on 14,303 head. Victorian supply gained 21% to 6,389 head, while throughput in SA increased significantly to total 1,457 head.  With the short week not affecting those over in the west, Muchea’s yarding was mainly firm week-on-week.

Quality begins to decline

Quality reportedly slipped across the majority of markets this week, as the wintery conditions take hold across most of the country. In Victoria, restockers were active on the plainer condition lines, however those carrying slightly more finish sold to the strongest demand. Restocker confidence at Gunnedah was boosted by up to 25mm of rain falling over the weekend. Feedlot buyers were selective at Roma Store, while medium and heavy weight yearling steers at Warwick sold well to the trade and feeder buyers. There continued to be limited numbers of grown steers yarded at Tamworth, Inverell and Wagga.

Prices mostly improve

At the conclusion of Tuesday’s markets the Eastern Young Cattle Indicator (EYCI) was 4¢ higher on 334.75¢/kg cwt. Trade steers lifted 2¢ to 196.7¢, while medium steers gained 7¢ to 179.1¢/kg. The heavy steer indicator was 9¢ lower on 182¢, while medium cows improved 1¢ to 117.3¢/kg. The feeder steer indicator was 3¢ higher on 191.4¢/kg.

 

Indonesia well stocked for Ramadan and Idul Fitri

18 June 2014

Indonesia, the world’s largest Muslim population, is reportedly well prepared in the lead up to Ramadan and Idul Fitri festivities this year. While consumption peaks during the season, and thereafter eases once the celebration finishes, adequate stocks and ongoing harvesting is expected to keep prices of foodstuffs and meat relatively stable through the period (Jakarta Post, 11 June).

It was reported that available livestock currently includes 18,900 head of imported cattle that are ready for slaughter, in addition to 3,037 head of local cattle. Available boxed beef stocks were also reported on 11 June to have totalled 8,316 tonnes.

The Indonesian government has also indicated it will allocate another 99,000 head of feeder cattle, adding to the 145,000 head that have already been imported into the market in the June quarter 2014. The new delivery of feeder cattle is expected to supply demand during the Idul Fitri festivities and two months following the peak season.

Australia exported 10,558 tonnes of beef to Indonesia during April and May, while New Zealand shipped 8,171 tonnes swt over the same period. It was reported by Jakarta Post that 45,000 tonnes of boxed beef were allocated to importers for the second quarter of 2014.

 

 UK cattle prices under pressure, beef imports up

18 June 2014

The ongoing imbalance between supply and demand in the United Kingdom has continued to put prime cattle prices under pressure in recent months. The Great Britain prime cattle price during April averaged 354 p/kg cwt, down 2% on the previous month and 9.4% year-on-year. The markets have remained under pressure in recent months, averaging 334 p/kg cwt by week ended 24th May with all prime cattle prices back almost 20% in the previous four weeks (EBLEX).

The significant fall in young bull throughput in all regions of the UK drove overall cattle slaughter during April down 2% year-on-year, to 189,000 head with production, totalling 83,600 tonnes cwe for the same period.

UK beef imports during April rose 12% year-on-year and 5% ahead of 2012 levels, to 19,700 tonnes swt. The increase has been driven by higher availability in Ireland, which beef production registered a 21% rise during April, and remains a major supplier to the UK – representing 69% of total imports. Beef shipments from Netherlands, Australia, Germany and Poland also registered increases for the period.

 

FAO Meat Price Index remains high in May

17 June 2014

The Food and Agricultural Organisation (FAO) Food Price Index averaged 207.8 points during May, 2.5 points (or 1.2%) lower month-on-month and down 7 points (or 3.2%) on the corresponding period last year. This was the second consecutive monthly fall since the ten-month high of 213 points recorded in March and was largely caused by weaker dairy, cereal and vegetable prices (FAO).

In contrast, the FAO Meat Price Index edged up slightly from April, at 189.1 points during May, 5% higher than May 2013 and the highest price since 2011. This was supported by seasonally higher ovine meat prices as the Australian and New Zealand peak production periods draw to a close.

 

Female cattle slaughter moves toward an unwelcome record

17 June 2014

Australian adult female cattle slaughter has been running at unprecedented levels for well over a year, driven by the unrelenting drought across large swathes of Queensland and northern NSW.

In fact, nationally, adult female cattle slaughter has been higher year-on-year for 22 consecutive months, posing the questions for many producers and processors alike – what will the supply base look like over the coming years? And how much longer will it last?

The current 22 month sequence has occurred at similar magnitudes in the past, namely 18 months in 06-07, 24 months in 97-98, 31 months commencing October 1989, 38 months commencing December 1974 and 22 months commencing February 1972.

Following each of these significant sequences, there were dramatic and almost equivalent reductions in female slaughter for similar periods, which of course is likely to occur once there are widespread improved seasonal conditions.

Furthermore, the reductions in female slaughter – driven by increased restocking and herd rebuilding demand – cow prices improved significantly, up 40-50% year-on-year in some instances.

Given the current extent of the herd liquidation, and unlikely event of a reduction in slaughter through winter, particularly given the BOM winter rainfall outlook, the reduction in the female base is likely to continue for at least the coming months. Indeed, the greater the reduction becomes, the fiercer the competition will be for what will be a significantly reduced national pool, once feed conditions improve.

 

Potential co-product values increase in May

17 June 2014

The potential co-product value for a trade steer (average carcase weight 274kg) in May averaged $198.44/head – down 3% on the previous month, yet up 10% compared with the same month last year, driven by price improvements across all categories (Kurrajong Meat Technology – May 2014 co-products monitor).

During May, the potential tallow value improved 12% year-on-year (despite easing 5% on April), at $48.92/head, underpinned by high processing demand reported through the month. There is strong demand for tallow in Singapore for use in renewable fuel production, while good demand is also reported in China.

The potential value of beef Meat and Bone Meal (MBM 50) lifted slightly (1%) on last month and increased 6% on May 2013, at $33.54/head. Reports suggest customers in Indonesia bought forward in preparation for Ramadan in July, thus recent deliveries have reportedly been at lower prices. Furthermore, high cattle kills have increased MBM 50 supplies in Australia, with US product also readily available for use in South East Asia.

May saw the potential beef offal value ease 2% on April, yet increase 2% year-on-year, at $49.98/head, with demand for omasum ($5.86/kg) and honeycomb tripe ($5.99/kg) reportedly strong in Hong Kong. Liver ($0.95/kg) prices also averaged dearer than a year ago, with strong interest reported in South Africa, while there was firm demand for cheek meat ($3.98/kg) in Korea.

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Beef Central's news headlines emailed to you -
FREE!